Japan Inflation

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Japan: Core prices deep into negative territory for first time in over two years in August

September 25, 2015

In August, the core consumer price index, which excludes volatile fresh food prices, was unchanged compared to the previous month, which was in line with the result tallied in July. The print mainly reflected that a sizeable increase in prices for food as well as for culture and recreation was offset by lower costs for fuel, lights and water charges and clothes and footwear.

Core prices fell 0.1% annually in August, which was down from the flat reading tallied in July. The print matched what market analysts had expected and represented the lowest print since April 2013. Overall inflation in August remained at the previous month’s 0.2%.

Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.2% over the same month last year in September (August: -0.1% year-on-year), which was in line with the result that market analysts’ had expected.

The Bank of Japan (BoJ) expects that core inflation will be between 0.3% and 1.0% in the fiscal year ending March 2016. In the following fiscal year, the BoJ sees inflation rising to somewhere between 1.2% and 2.1%. FocusEconomics Consensus Forecast panelists expect inflation of 0.8% in the calendar year 2015, which is unchanged from last month’s estimate. In 2016, the panel sees inflation at 1.0%.


Author: Ricard Torné, Lead Economist

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Japan Inflation August 2015

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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