Japan Inflation August 2016


Japan: Drop in core prices stabilizes in August

September 30, 2016

In August, the core consumer price index was flat compared to the previous month, which was above the 0.2% decline in July. The print mainly reflected that lower prices for clothes and footwear as well as for fuel, light and water charges were offset by higher prices for culture and recreation.

Core prices were down 0.5% over the same month last year in August, which matched July’s reading. The print was in line with the result expected by market analysts. Overall consumer prices fell 0.5% in August, which was below July’s 0.4% drop.

Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.5% in September over the same month last year (July: -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 0.1% in calendar year 2016, which is down 0.1 percentage points from last month’s estimate. In 2017, the panel sees inflation at 0.6%.


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Japan Inflation Chart

Japan Inflation August 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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