According to official reports, consumer prices in Japan fell by 0.5% on a yearly basis in August, having matched analysts’ expectations. Thus, the deflation rate accelerated from July when prices dipped down by 0.4%.
In August of this year consumer prices excluding fresh food slid by 0.5% annually, whereas experts expected a decrease by 0.4%.
Consumer prices excluding food and energy rose by 0.2% from August 2015 which was the slowest growth since September 2013.
As for households spending, it lost 4.6% on a yearly basis exceeding expectations of falling by 2.5%. This indicates weakening of private consumption which makes up almost two thirds of Japan’s economy.
Taro Saito, chief economist at NLI Research Institute, said that a slowdown in consumer inflation excluding food and energy prices is worrisome. The expert believes that if this tendency persists, the Bank of Japan won’t be able to blame oil prices for weakening inflation and it will be forced into further easing.
