Japan slipped back into deflation as data released today show. All item CPI slowed to 0.1% yoy in April, down form 0.4% yoy. CPI core (all-item less fresh food), dropped to -0.2% yoy, down from 0.4% yoy. That’s the first negative core CPI reading since December 2016. CPI core-core (all-item less energy, fresh food) slowed to 0.2%, down from 0.6% mom.

The data suggests clear downward pressure on prices due to coronavirus containment pressure. Also, core CPI could head deeper into negative territory as services and energy inflation wane ahead.

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