Japan all item inflation rose to 0.3% yoy in July, up from 0.1%. Core CPI, all item ex fresh food, was unchanged at 0.0% yoy, below expectation of 0.1% yoy. Core-core CPI, all item ex fresh food and energy was unchanged at 0.4% yoy.
Outlook for core inflation suggests that Japan is close to, if not already in, a deflationary situation. It’s becoming increasingly unrealistic to achieve BoJ’s 2% inflation target in any projection horizon.
