Japan: Inflation continues to fall in October
November 25, 2011
In October, the core consumer price index, which excludes volatile fresh food prices, fell 0.1% in seasonally adjusted terms over the previous month, which followed the 0.2 contraction recorded in September. Annual core inflation dived into negative territory for the first time in four months, falling from 0.2% in September to minus 0.2% in October, which was below the 0.1% drop expected by the market. Inflation was down partly because of the fading effect of the increases in tobacco taxes and casualty-insurance fees in the same month last year, helped along by lower import prices due to a strong yen. Annual overall inflation declined from a flat reading in September to minus 0.2% in October. Moreover, core consumer prices in Tokyo, which are available one month before the nationwide figures, fell 0.5% in November over the same month last year, after contracting 0.4% in October, and confirmed that prices are on a downward trend.