Tokyo Core Inflation Pressures Continue To Moderate

Tokyo CPI was mixed for September. The headline y/y print was firmer than forecast at 2.8%, against 2.7% forecast. We were still down a touch on the prior 2.9% outcome. The core ex-fresh food metric was weaker though at 2.5% y/y (2.6% forecasts and prior 2.8%). The ex-fresh food, energy measure also printed below consensus estimates at 3.8%y/y (3.9% forecast, 4.0% prior). See the chart below.

• The core metric which excludes all food and energy also eased back to 2.4%y/y in September from 2.6% in August.
• Good prices were up 0.4% m/m, reversing the -0.1% falls in August. Services inflation was flat. Much of this month rise in goods inflation was food driven. We were +1.4% m/m, while fresh food surged 6.4% m/m. Clothing and footwear were +2.6% m/m, another source of pressures.
• Utilities continued to fall, -2.6% m/m, but were joined by entertainment, -1.8%, transport, commnication (-0.7%) and medical care (-0.1%).
• 7 out of 10 sub-indices saw slower or the same y/y price momentum compared with August.

Fig 1: Tokyo CPI - Y/Y, Headline & Core Measures

Source: MNI - Market News/Bloomberg