Released from Japan, Tokyo all-items CPI slowed to 0.2% in April, down from 0.4% yoy. Core CPI (all items less fresh food) turned negative to -0.1% yoy, down from 0.4% yoy. Core-Core CPI (all items less fresh food and energy) dropped to 0.2% yoy, down from 0.7% yoy.
The capital city reported first decline in core CPI in three years. As an indicator of nationwide inflation trends, it raised concerns that Japan is returning into deflation. But that’s not totally unexpected as BoJ also forecast core inflation to turn negative to -0.7 to -0.3% this fiscal year.
Economy Minister Yasutoshi Nishimura pledged today that “the government will work with the central bank to ensure Japan absolutely does not slip back into deflation”.
