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24 Feb 2015
Japan's core inflation continues to fall - Nomura
FXStreet (Bali) - Crude oil prices remaining low could further depress inflation rate in Japan, notes Nomura, adding that other wide range of consumer goods may also weight to see core inflation continuing to fall.
Key Quotes
"In December 2014, the all-Japan core CPI (general index excluding fresh food) was up 2.5% y-y. Excluding the impact of the consumption tax hike, it was up 0.5% y-y, marking a 0.2ppt smaller rise than in the previous month. The core core CPI (general index excluding food (except alcoholic beverages) and energy), which provides a more accurate view of the underlying price trend, was up 2.1% y-y and up 0.4% excluding the impact of the consumption tax hike, but pegged level m-m. Rates of price increases declined for energy-related items, such as gasoline and kerosene, as well as for a wide range of consumer goods, from TVs and other electrical appliances, to apparel and detergent."
"The core CPI for Tokyo, closely watched owing to the timeliness of the data, was +2.2% y-y in January 2015 and +0.3% excluding the impact of the consumption tax hike, down 0.1ppt m-m. The core core inflation rate was +1.7% and +0.2% excluding the impact of the tax hike, down 0.1ppt from the previous month. Besides gasoline and other energy items and a broad range of durable goods, the inflation rate was weighed down notably by general service prices. Since early January, companies have been raising prices for instant noodles, edible oils, boxed lunches, and other items in response to increases in input prices and distribution costs resulting from the weak yen. Rising food prices have been putting upward pressure on core inflation."
"The latest figures indicate a further decline in inflation compared with the previous month. In addition to deterioration in the output gap following the consumption tax hike, the impact of recent declines in crude oil prices has gradually been showing through. There is a slight lag between the decline in crude oil prices and the impact on the CPI, but we estimate that the all-Japan core inflation rate excluding the impact of the tax hike would slow to 0% y-y in Apr-Jun"
Key Quotes
"In December 2014, the all-Japan core CPI (general index excluding fresh food) was up 2.5% y-y. Excluding the impact of the consumption tax hike, it was up 0.5% y-y, marking a 0.2ppt smaller rise than in the previous month. The core core CPI (general index excluding food (except alcoholic beverages) and energy), which provides a more accurate view of the underlying price trend, was up 2.1% y-y and up 0.4% excluding the impact of the consumption tax hike, but pegged level m-m. Rates of price increases declined for energy-related items, such as gasoline and kerosene, as well as for a wide range of consumer goods, from TVs and other electrical appliances, to apparel and detergent."
"The core CPI for Tokyo, closely watched owing to the timeliness of the data, was +2.2% y-y in January 2015 and +0.3% excluding the impact of the consumption tax hike, down 0.1ppt m-m. The core core inflation rate was +1.7% and +0.2% excluding the impact of the tax hike, down 0.1ppt from the previous month. Besides gasoline and other energy items and a broad range of durable goods, the inflation rate was weighed down notably by general service prices. Since early January, companies have been raising prices for instant noodles, edible oils, boxed lunches, and other items in response to increases in input prices and distribution costs resulting from the weak yen. Rising food prices have been putting upward pressure on core inflation."
"The latest figures indicate a further decline in inflation compared with the previous month. In addition to deterioration in the output gap following the consumption tax hike, the impact of recent declines in crude oil prices has gradually been showing through. There is a slight lag between the decline in crude oil prices and the impact on the CPI, but we estimate that the all-Japan core inflation rate excluding the impact of the tax hike would slow to 0% y-y in Apr-Jun"