Japan Inflation

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Japan: Core inflation stabilizes in July

August 29, 2014

In July, the core consumer price index, which excludes volatile fresh food prices, inched up 0.1% over the previous month. July’s result, which came in above the flat reading recorded in June, mainly reflected that higher prices for transportation and communication and for culture and recreation were nearly offset by lower prices for clothing and footwear and for furniture and household utensils.

Annual core inflation remained steady at the previous month’s 3.3% in July, which was in line with market expectations. Overall inflation ticked down from 3.6% in June to 3.4% in July.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—inched down from 2.8% in July to 2.7% in August, which matched the result that market analysts had expected.

The Bank of Japan (BoJ) expects that core inflation will be between 3.2% and 3.5% in the fiscal year ending March 2015. In the following fiscal year, the BoJ sees inflation falling to somewhere between 1.9% and 2.8%. FocusEconomics Consensus Forecast panelists expect inflation of 2.7% in the calendar year 2014, which is up 0.1 percentage points from last month’s estimate. In 2015, the panel sees inflation at 1.7%.


Author: Ricard Torné, Head of Economic Research

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Japan Inflation July 2014

Note: Year-on-year and month-on-month var. of consumer price index in %.
Source: Statistics Bureau (SB) and FocusEconomics calculations.


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