Japan Inflation December 2016

Japan

Japan: Decline in core prices softens in December

January 27, 2017

In December, the core consumer price index decreased 0.2% compared to the previous month, which followed November’s flat reading. The print mainly reflected lower prices for food, clothing and footwear.

Core prices were down 0.2% from the same month of 2015 in December, which followed November’s 0.4% drop and was a smaller drop than the 0.3% expected by market analysts. Overall inflation came in at 0.3% in December, below November’s 0.5%.

Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.3% in January from the same month last year (December: -0.6% year-on-year).

The Bank of Japan (BoJ) expects that core inflation will be between 0.6% and 1.6% in the fiscal year ending March 2018. In the following fiscal year, the BoJ sees inflation between 0.9% and 1.9%. FocusEconomics Consensus Forecast panelists expect inflation of 0.5% in calendar year 2017, which is unchanged from last month’s estimate. In 2018, the panel sees inflation at 0.9%.


Author: Angela Bouzanis, Senior Economist

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Japan Inflation December 2016 1

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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