Japan Inflation Falls to 7-Month Low

Japan's consumer price inflation fell to 0.2 percent year-on-year in September 2019 from 0.3 percent in the previous month and well below market expectations of 0.4 percent. It was the lowest inflation rate in seven months, mainly pushed down by lower gasoline prices. The latest reading raises the chances of further stimulus after the Bank of Japan decided to leave policy unchanged during its September meeting but left the window wide open for easing, calling for a review of prices and the economy in October.
Statistics Japan l Mario | mario@tradingeconomics.com 10/18/2019 10:10:47 AM
Year-on-year, prices continued to decline for transportation & communication (-1.6 percent versus -1.2 percent in August), on lower gasoline prices (-6.9 percent vs -4.8 percent) and communication (-2.9 percent, the same pace as in August), with mobile phone fees down 5.2 percent (vs -5.7 percent) as major wireless carriers cut charges under pressure from the government. Also, inflation edged down for culture & recreation (1.0 percent vs 1.1 percent) and fuel, light & water charges (0.2 percent vs 1.2 percent), in particular electricity (0.4 percent vs 1.8 percent) and gas (0.4 percent vs 1.8 percent). At the same time, prices advanced at the same pace for housing (at 0.2 percent); medical care (-0.2 percent) and miscellaneous (at 1.0 percent). Moreover, cost of clothes & footwear was flat after climbing 0.6 percent in the previous month.  

On the other hand, inflation picked up for food (0.5 percent vs 0.1 percent), boosted by fish & seafood (0.2 percent vs -2.9 percent), dairy products & eggs (2.2 percent vs 1.9 percent) and fruits (4.8 percent vs 2.1 percent); furniture & household utensils (2.7 percent vs 2.3 percent) and education (0.7 percent vs 0.6 percent).

Core consumer prices, which include oil products but exclude fresh food prices, rose 0.3 percent from a year earlier in September 2019, easing from a 0.5 percent in increase in the previous month and matching market expectations. That was the lowest rate since April 2017. 

Stripping away the effect of fresh food and energy, consumer prices rose 0.5 percent in September, edging down from the 0.6 percent print for the previous month.

On a seasonally adjusted monthly basis, consumer prices were unchanged in September for the second month.


Japan Inflation Falls to 7-Month Low