Japan inflation remaining listless, no respite for BoJ
TOKYO: Japan is expected to report next week that core consumer prices were unchanged in January from a year earlier, halting a brief rise in the previous two months, a Reuters poll showed, adding to doubts about policymakers' ability to reflate the economy.
Sluggish consumer demand and sliding fuel prices likely kept inflation subdued, while effects from the yen's weakening in the last few years have fallen off, analysts said.
The core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, likely registered no change last month after annual 0.1 percent rises in December and November, according to the poll of 22 analysts.
"Energy price falls such as gasoline and electricity are the main factor. But there is also a pause in price gains in foods and daily necessities due to weak consumer spending," Takumi Tsunoda, senior economist at Shinkin Central Bank said in the survey. Koya Miyamae, senior economist at SMBC Nikko Securities, said that core consumer prices will likely fall in February and continue declining until around June even if currency and oil markets stay the same.
"Core CPI is expected to bottom out around summer but it may be difficult to return to plus territory within this year," he said. Core consumer prices in Tokyo, available a month before the nationwide data, likely declined 0.2 percent in February from a year earlier, compared with a 0.1 percent slip in the year to January.