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Widespread Price Freeze Ahead Of Midterm Election

MNI BRIEF: Japan Aug Core CPI Unchanged Y/Y Vs. -0.2% In July

MNI (Tokyo)

Prices for communications fell nearly 45% in August.

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Japan's August annual core consumer inflation rate was unchanged from a year earlier following -0.2% in July as the negative contribution from lower mobile phone charges was eased by higher contributions from accommodations, data from the Ministry of International Affairs and Communication released on Friday showed.

The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) fell 0.5% y/y in August, improving from -0.6% in July. Prices for communications fell 44.8% y/y in August, widening from -39.6% in July. The negative contribution also widened to -1.23 percentage point in July from -1.09 pp in July.

The negative contribution was somewhat eased by the bigger positive contribution from accommodations (+0.33 pp in August vs. +0.15 pp in July).

Bank of Japan officials maintained the view that the underlying price trend, excluding special factors, remains solid. Prices for processed foods, accounting for 15% of the total CPI and on which BOJ officials focus, rose 0.2% y/y in August, improving from 0.0% in July.