Japan consumer prices flat

TOKYO (AFP/APP): Japan’s core consumer prices were unchanged year-on-year in August, ending a run of 12 consecutive monthly declines, official data released Friday showed.
The fresh data was in line with market expectations, and comes after a 0.2 percent drop in July.
Core consumer prices, which exclude volatile fresh food, had been trimming the pace of their declines in recent months, as global commodities inflation offset the impact of a pandemic-induced spending slump.
Data showed prices jumping for fuel, light and water charges, as well as furniture and household utensils. But transport and communication dipped, along with services.
Consumer prices are closely watched for clues on the Bank of Japan’s monetary policy decisions.
The bank has a long-held inflation target of two percent, but has struggled to even approach the goal despite a raft of monetary policy measures.
The central bank on Wednesday maintained its ultra-loose monetary policy to aid the economy during the pandemic. Many advanced economies are experiencing inflationary pressure as their economies emerge from the pandemic and massive financial support programmes.
Tom Learmouth, a Japan economist at Capital Economics, said Japan could expect to see a temporary spike in inflation, though still far below that seen in some advanced economies.
In a note, he forecast underlying inflation would peak at around 1.0 percent early next year.
“We think inflation will temporarily spike over the coming months due to upwards pressure on goods prices from continued supply shortages and the release of pent-up demand in the services sector,” he wrote.