Consensus outlook for Mace News
0830 JST (2330 GMT/1930 EDT Thursday, June 18) The Ministry of Internal Affairs and Communications releases May CPI.
Mace News median: total CPI +1.5% y/y (range: +1.4% to +1.6%) vs. Apr +1.4%; core CPI (ex-fresh food) +1.4% y/y (range: +1.4% to +1.5%) vs. Apr +1.4%; core-core CPI (ex-fresh food, energy) +1.9% y/y (range +1.7% to +2.0%) vs. Apr +1.9%
By Chikafumi Hodo
TOKYO (MaceNews) – Japan’s nationwide core consumer price index (CPI), which excludes fresh food, is expected to be little changed on the year in May, but is likely to remain below the Bank of Japan’s 2% inflation target for a fourth consecutive month.
Mirroring the trend seen in the Tokyo CPI released on May 29, consumer inflation continued to decelerate amid slower food price growth and the effects of government gasoline subsidies. In addition, the Tokyo government’s policy of waiving basic water service charges during the summer, starting in May, as well as reductions in early childcare costs, including nursery school fees, contributed to a further easing in inflation.
These measures have helped restrain inflationary pressures even as geopolitical tensions in the Middle East have pushed up international oil and other commodity prices. The tensions have also weighed on the yen, raising import costs and creating upward pressure on domestic prices.
The core CPI is expected to be unchanged at a 1.4% rise on the year in May, while the overall CPI is forecast to rise 1.5% after increasing 1.4% in April. Core-core CPI, which excludes both fresh food and energy, is also expected to remain unchanged, rising 1.9% from a year earlier in May.