Japan Inflation December 2015


Japan: Core inflation unchanged in December

January 29, 2016

In December, the core consumer price index, which excludes volatile fresh food prices, fell 0.2% compared to the previous month, which was slightly the flat reading tallied in November. The print, which hit an 11-month low, mainly reflected a sizeable drop in prices for clothes and footwear as well as for transportation and communication.

Core inflation in December was unchanged at last month’s 0.1%. The print was in line with the result predicted by market analysts. Overall inflation in December fell from 0.3% in November to 0.2%.

Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.1% in January over the same month of the previous year (December: +0.1% year-on-year), which contrasted the 0.1% rise that market analysts’ had expected.

The Bank of Japan (BoJ) expects that core inflation will be between 0.2% and 1.2% in the fiscal year ending March 2017. In the following fiscal year, the BoJ sees inflation between 2.0% and 3.1% and somewhere between 1.0% and 2.1%, excluding the effects of the expected consumption tax hike in April 2017, somewhere between 1.0% and 2.1%. FocusEconomics Consensus Forecast panelists expect inflation of 0.8% in the calendar year 2016, which is up 0.1 percentage points from last month’s estimate. In 2017, the panel sees inflation at 1.9%.

Author: Ricard Torné, Lead Economist

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Japan Inflation Chart

Japan Inflation December 2015 0

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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