Japan Inflation Rate Unchanged at 0.7% in June

Japan's consumer price inflation came in at 0.7 percent year-on-year in June 2019, unchanged from the previous month and matching market expectations. A faster rise in cost of food and housing was offset by a steeper decline in prices of transport and communication.

Inflation was steady for education (at 0.6 percent, the same as in May) and prices of clothes & footwear were flat for the second month in a row. Meantime, cost slowed for fuel, light & water charges (2.2 percent vs 3.2 percent in May), namely electricity (2.5 percent vs 3.6 percent), and gas (3.9 percent vs 4.8 percent); miscellaneous goods & services (0.9 percent vs 1 percent); medical care (0.6 percent vs 0.7 percent); and furniture and household utensils (1.8 percent vs 2.6 percent). In addition, prices of transportation & communication fell for the seventh consecutive month and at the steepest pace since November 2016 (-1.3 percent vs -0.4 percent). 

On the other hand, food prices rose for the third straigth month hitting its highest level since October last year (1.4 percent vs 0.8 percent). Among food, cost increased further for cereals (1.3 percent vs 1.1 percent); fish & seafood (2 percent vs 1.6 percent), mostly fresh fish & seafood (1.2 percent vs 0.9 percent); meat (1.4 percent vs 0.9 percent); dairy products & eggs (2 percent vs 1.9 percent); vegetables & seaweeds (0.9 percent vs 0.2 percent), in particular fresh vegetables (1 percent vs flat reading); and cooked food (1.1 percent vs 0.9 percent); oils, fats & seasonings (0.3 percent vs flat reading). Also, cost of fresh food rebounded (2.8 percent vs -0.1 percent) while prices for meals outside the home were unchanged for the third consecutive month (at 1 percent). Additionally, cost went up for housing (0.1 percent vs a flat reading) and advanced at a faster pace for culture & recreation (1.5 percent vs 1.3 percent).

Annual core consumer inflation, which excludes fresh food, fell to 0.6 percent in June, the lowest since July 2017, from 0.8 percent in May and also in line with estimates. The latest figure remained well below the Bank of Japan's 2 percent target. Meantime, stripping away the effect of fresh food and energy, consumer prices rose by 0.5 percent year-on-year in June, the same as in a month earlier and slightly below estimates of a 0.6 percent rise.

On a seasonally adjusted monthly basis, consumer prices were flat for the second sucessive month.

Japan Inflation Rate Unchanged at 0.7% in June

Statistics Japan l Rida Husna | rida@tradingeconomics.com
7/19/2019 8:28:42 AM