MNI BRIEF: Japan June Core CPI Lower On 2020-Base Year Change

Japan's June core CPI has been revised down to -0.5% from +0.2% due to a change in the base year to 2020 from 2015, government data released Friday showed. The move was widely expected, as the weight of lower mobile phone change was set to increase. The government will release July nationwide CPI, also to be calculated from a 2020 base, on Aug. 20.

The BOJ had estimated the impact of lower mobile phone charges will likely be in a range of -0.5 to -1.0 pp, but officials accept the rebasing could have a greater impact than previously expected. The year-on-year rate of CPI increase is highly likely to be revised downward to reflect the base year change.

Economists at the central bank don't expect the downward revision, seen caused by a temporary factor, to affect the underlying trend but they are watchful of how it affects wider inflation expectations.