Transport & Higher Services Inflation Offset Further Utilities Dip

Japan's national August CPI was a touch firmer than expected. The headline printed at 3.2% y/y, versus 3.0% forecast (3.3% prior). The ex fresh-food measure rose 3.1% y/y, versus 3.0% forecast and 3.1% prior. The core measure (ex fresh-food and energy) was as expected at 4.3% y/y, which was also the prior outcome.

• The series that excludes all food and energy was also steady in y/y terms at 2.7%, the same as the July outcome.
• In terms of the detail, good prices rose 0.3% m/m (0.5% prior), while services inflation ticked up to 0.1% m/m from flat in July.
• Food prices rose in m/m terms, but were down from the July pace. Utilities (-2.3%m/m), household goods (-0.8%m/m) and clothing, footwear (-0.8% m/m) were the main drags. Offsets came from transport and communication (+1.0% m/m) and entertainment (+1.8% m/m).
• In y/y terms the biggest drag remains from utilities, -12.3% y/y. Food inflation remained elevated at 8.6% y/y, while transport and entertainment saw further gains in y/y terms.