Japan national CPI core (all items less fresh food) was unchanged at -0.2% yoy in May, worse than expectation of an improvement to -0.1% yoy. That’s also the second straight month of negative reading. Nevertheless, CPI core-core (all times less fresh food, energy) rose back to 0.4%, up from 0.2% yoy, which might be a sign of relief. Headline CPI (all items) was unchanged at 0.1% yoy.
In the minutes of April 27 BoJ meeting, one membered warned that “the economy might fall into deflation”, “fiscal and monetary authorities could further cooperate with each other”. Another member said BoJ should “consider what was necessary to avoid deflation”. A member said it was appropriate to “revise the forward guidance” with a view to “not allowing deflation to take hold”.
