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--Japan June Core CPI +0.4% Y/Y; MNI Median +0.4%; May +0.4% 
--Tokyo July Core CPI +0.2% Y/Y; MNI Median +0.1%; June Unchanged
     TOKYO (MNI) - Japan's consumer price index from the Ministry of Internal
Affairs and Communications released Friday. CPI figures date to 1970 under the
2015 base year.
     * Japan's national average core CPI (excluding fresh food but including
energy prices) rose 0.4% on year in June, as forecast by economists, marking the
sixth straight year-on-year rise after +0.4% in May and +0.3% in April. The
index posted the first rise in 13 months in January. The increase was led by
higher electricity charges but overall energy costs made a smaller contribution
to the core CPI than previously seen. The contribution of processed food and
household durable goods increased.
     * Year-on-year gains in overall energy costs are expected to support a
gradual rise in consumer prices but the increase in gasoline prices continues to
slow and firms remain cautious about raising retail prices for fear of losing
market share or denting private consumption.
     * The slow pickup in the CPI led the Bank of Japan board to revise down its
medium-term projections at its latest meeting on July 19-20. The board revised
down its median forecast for inflation rate in the current fiscal year to +1.1%
from +1.4% made in April, and pushed back the estimated timing of hitting the 2%
price stability target to "around fiscal 2019" from "around fiscal 2018."
     * Excluding the upward pressure from energy prices, the underlying price
trend has shown a slow improvement. The CPI excluding fresh food and energy (the
core-core CPI) was unchanged on year in June, after being flat in May and April
and falling 0.1% in March.
     * In June, the year-on-year increase in gasoline prices slowed sharply to
+6.1% from +12.3% in May while electricity charges posted a 4.9% rise after
rising 2.5% in the previous month. Overall energy costs rose 4.9% on year in
June after rising 5.1% in May.
     * The total CPI also gained 0.4% on year, posting the ninth straight
year-on-year rise after +0.4% in May, in the aftermath of markups for marine
products and beer as well as continued gains in energy costs.
     * The central Tokyo core CPI posted the first year-on-year rise in two
months, up 0.2% in July after being flat in June. The increase was led by higher
prices of air conditioners amid heat waves as well as utilities and gasoline.
     * In national CPI data, goods prices excluding fresh food rose 1.0% on year
in June following +0.9% in May. Overall goods prices rose 0.9% on year after
rising 0.8% in the previous month.
     * But service costs, which account for a little over half of the CPI
basket, fell 0.1% on year in June after being flat in May, hit by what the BOJ
sees as a temporary drop in mobile communications charges. Continued labor
shortages in some sectors are supporting prices for restaurants, housekeeping
and medical services while rents and imputed rents remain depressed.
     * June total CPI energy costs +4.9% on year; May +5.1%
     * June total CPI foodstuffs excluding fresh food +0.9%; May +0.8%
     * June total CPI household durable goods -1.0%; May -2.2%
     * June total CPI consumer electronics -3.7%; May -3.7%
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email:
[TOPICS: MAJDS$,M$A$$$,M$J$$$]