• Home
• About/Contact
• Economic Reports
• Research
• Advertising

• Business
• Economics
• Reports
• Finance
• Marketing
• Politics
• Real Estate
• Services
• Retail
• Tech

Subscribe

Japan’s core CPI up 1.0% in November, flat with energy costs stripped out

After seeing rises of 1.9% in October, 2.3% in September and 2.4% in both July and August, Japan’s core consumer price index cooled to 1.0% in November, according to data released today by the Ministry of Internal Affairs and Communications. November was thus the fourteenth consecutive month in which Japan’s core consumer prices have seen an increase.

As Japan includes energy prices as part of its core CPI, it’s always helpful to look at what the CPI looks like with energy stripped out. Here’s a breakdown of CPI categories for November:

• November general nationwide consumer price index: +1.0% (+1.7% in October)
• November general nationwide consumer price index (excluding rent): +1.2% (+2.1% in October)
• November nationwide core CPI (excluding fresh food): +1.0% (+1.9% in October)
• November nationwide consumer price index (excluding fresh food and energy): 0.0 (+0.2% in October)

What’s worth noting is that when fresh food and energy are both stripped out, we see nil change in November’s CPI. The last time this was seen was in August, when the “core” CPI was up 2.4% year-on-year. Falling oil prices are starting to have an effect on “core core” CPI, and as oil prices were closing in at $100 a barrel last December (finally hitting $100 on January 2), the difference between energy prices is bound to accelerate in December.

In fact, energy prices continued to contribute most to core CPI data. Here is the breakdown of price increase by major categories:

• Fuel, light and water charges +4.8% (Previous: +8.0%)
• Food +3.7% (+3.2%)
• Education +0.7% (+0.7%)
• Clothes and footwear +0.5% (+0.6%)
• Furniture and household utensils +0.2% (+0.3%)
• Housing +0.2% (+0.2%)
• Miscellaneous +0.2% (+0.1%)

• Medical care -0.5% (-0.1%)
• Reading and recreation -0.5% (-0.2%)
• Transportation and communication -2.3% (+1.7%)

Whereas only two categories had shown year-on-year price declines in October, that number grew to three in November as “Transportation and communication” costs fell. Most other categories have remained remarkably stable over the past three months, with energy costs showing a notable decline in contribution to CPI increases. In November, only the “Miscellaneous” and “Food” categories showed greater year-on-year gains than they had in October, though the “Miscellaneous” change is a minuscule one at best.

It now seems likely that “core core” CPI will slip into deflation in December, as the gap between energy costs grows and it appears highly unlikely that any other category will see inflationary pressure on the sort of scale needed to push the overall figure above the zero mark.

It should also be noted that Japan’s corporate services price index fell 1.9% in November, according to data released Wednesday by the Bank of Japan. According to that report, prices for transportation saw the biggest fall, down 7.8%, while advertising fell 3.0%.

As few as four months ago, fears of deflationary pressure seemed the furthest thing from anyone’s mind.

Comments

Copyright © 2006-2010 Japan Economy News

Privacy Policy | Disclaimer