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30 Mar 2015
All-Japan core inflation might dip into negative territory – Nomura
FXStreet (Barcelona) - Reviewing the February all-Japan CPI release, Japan Economists at Nomura, share that the all-Japan core inflation rate risks a dip into negative territory.
Key Quotes
“The all-Japan core CPI (general index excluding fresh food) was +2.0% y-y in February, slightly below the consensus (Bloomberg survey median) forecast of +2.1%. The index was down 0.2ppt m-m, continuing the relatively fast pace of decline after a 0.3ppt m-m slide in January.”
“Excluding the impact of the consumption tax hike it was up 0.0% y-y. Items that weighed particularly heavily on the core inflation rate included energy-related products such as gasoline and kerosene, which remained on a decline, and room air conditioners, which also saw a large contraction.”
“The core CPI (general index excluding food (except alcoholic beverages) and energy), which provides a more accurate view of the underlying price trend, was +2.0% y-y and +0.3% excluding the impact of the consumption tax hike, but down 0.1ppt m-m.”
“This month's figures indicate a further slowing in inflation. In addition to deterioration in the output gap following the consumption tax hike, the impact of persistent declines in crude oil prices from the end of 2014 through early 2015 is gradually starting to materialize.”
“Against this backdrop, we project that the core inflation rate will temporarily dip below 0% y-y.”
Key Quotes
“The all-Japan core CPI (general index excluding fresh food) was +2.0% y-y in February, slightly below the consensus (Bloomberg survey median) forecast of +2.1%. The index was down 0.2ppt m-m, continuing the relatively fast pace of decline after a 0.3ppt m-m slide in January.”
“Excluding the impact of the consumption tax hike it was up 0.0% y-y. Items that weighed particularly heavily on the core inflation rate included energy-related products such as gasoline and kerosene, which remained on a decline, and room air conditioners, which also saw a large contraction.”
“The core CPI (general index excluding food (except alcoholic beverages) and energy), which provides a more accurate view of the underlying price trend, was +2.0% y-y and +0.3% excluding the impact of the consumption tax hike, but down 0.1ppt m-m.”
“This month's figures indicate a further slowing in inflation. In addition to deterioration in the output gap following the consumption tax hike, the impact of persistent declines in crude oil prices from the end of 2014 through early 2015 is gradually starting to materialize.”
“Against this backdrop, we project that the core inflation rate will temporarily dip below 0% y-y.”