Japan Inflation Rate Stays at 7-Month Low in October

Japan's consumer price inflation stood at 0.2 percent year-on-year in October of 2019, unchanged from the previous month and below market expectations of 0.3 percent. This remained the lowest inflation rate in since February, with fuel prices falling for the first time in 31 months and cost of transport declining for the eleventh straight month.

Cost of fuel, light & water charges declined by 0.8 percent year-on-year in October, the first fall since March 2017, compared to a 0.2 percent gain in September, namely electricity (-1 percent vs 0.4 percent), and gas (-0.4 percent vs 0.4 percent). In adddition, prices  of transportation & communication fell further (-1 percent vs -1.6 percent) and those of education slumped (-7.8 percent vs 0.7 percent). Also, cost of miscellaneous goods & services dropped by 2.9 percent, after a 1 percent rise in a month earlier. 

In contrast, food prices rose 0.9 percent, the most in three months, after a 0.5 percent gain in September. Among food, cost increased faster for cereals (1.2 percent vs 0.9 percent); fish & seafood (2.7 percent vs 1.2 percent), mostly fresh fish & seafood (2.9 percent vs 0.2 percent);  cooked food (1.4 percent vs 0.9 percent); and meat (0.7 percent vs 0.4 percent); meals outside the home (3 percent vs 1 percent). Also, prices went up faster for housing (0.7 percent vs 0.2 percent), culture & recreation (2.3 percent vs 1 percent), clothes & footwear (1.2 percent vs flat reading), medical care (0.7 percent vs -0.2 percent), and furniture and household utensils (4.2 percent vs 2.7 percent). 
Annual core consumer inflation, which excludes fresh food, edged up to 0.4 percent in October from 0.3 percent in September 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 0.7 percent year-on-year in October, following a 0.5 percent rise in a month earlier and above estimates of a 0.5 percent advance.

On a seasonally adjusted basis, consumer prices were flat for the third straight month.

Japan Inflation Rate Stays at 7-Month Low in October

Statictics Japan,l Rida Husna | rida@tradingeconomics.com
11/22/2019 1:08:32 AM