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MNI (London)
--Japan Core CPI Up 0.7% y/y In December Vs. +0.9% in November
     TOKYO (MNI) - Japan's nationwide core consumer price index rose 0.7% on
year in December, decelerating from +0.9% in November, with Bank of Japan
officials still cautious over their inflation outlook.
     The inflation rate remains stubbornly slow in responding to a sustainable
economic expansion and tight labor market conditions, as firms are still
cautious about raising retail prices.
     The BOJ board will likely lower the median inflation forecast in fiscal
2019 from +1.4% and in fiscal 2020 from +1.5% made in October, but the board
will keep the view that there is still momentum toward hitting the 2% price
     BOJ officials no longer expect the pace of Japan's consumer price rise to
accelerate sharply, as structural factors impeding price rises will not
disappear anytime soon.
     The December's deceleration in the nationwide core CPI was partly expected,
as the  Tokyo core CPI for the same month, a leading indicator, slowed to 0.9%
on year vs. +1.0% in November, indicating the nationwide data would also likely
     Prices for goods rose 0.2% on year in December, sharply slowing from +1.4%
in November. Prices excluding fresh food rose 1.2% in December, also slowing
from +1.6% in November.
     On the bright side, prices for eating out rose 1.1% on year in December,
unchanged from November's level, showing upward pressure on prices from labor
shortages and high costs continued but didn't accelerate.
     The national average core CPI (excluding fresh food) rose 0.7% on year in
December, recording the 24th straight year-on-year rise, following a 0.9% gain
in November. It was, however, weaker than the MNI median forecast of +0.8%.
     BOJ officials are now focused on annual corporate price revisions expected
in or after April.
--MNI London Bureau; tel: +44 203-586-2225; email:
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
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MNI London Bureau | +44 203-865-3812 |