Japan Inflation October 2016


Japan: Decline in core prices softens in October

November 25, 2016

In October, the core consumer price index increased 0.2% compared to the previous month, which was above September’s flat reading. The print mainly reflected higher prices for food, furniture and household utensils as well as for culture and recreation.

Core prices were down 0.4% from the same month last year in October, which was up from September’s 0.5% drop and in line with market analysts’ expectations. Overall consumer prices rose 0.1% in October, contrasting September’s 0.5% decline.

Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.4% in November from the same month last year (October: -0.4% year-on-year).

The Bank of Japan (BoJ) expects that core inflation will be between 0.0% and 0.3% in the fiscal year ending March 2017. In the following fiscal year, the BoJ sees inflation between 0.8% and 1.8%. FocusEconomics Consensus Forecast panelists expect consumer prices to decline 0.2% in calendar year 2016, which is down 0.1 percentage points from last month’s estimate. In 2017, the panel sees inflation at 0.5%, which is also down 0.1 percentage points from last month’s forecast.

Author: Ricard Torné, Lead Economist

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Japan Inflation Chart

Japan Inflation October 2016

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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