Japan Consumer Prices Fall 0.2 percent

Japan’s consumer prices unexpectedly fell and retail sales missed analysts’ forecasts, adding to evidence that the economy’s expansion is faltering as gains in the yen and austerity measures in Europe hit exports.

Consumer prices excluding fresh food fell 0.2 percent in June from a year earlier, the statistics bureau said in Tokyo today. The median estimate in a Bloomberg News survey was for no change in prices. Retail sales rose 0.2 percent, a separate report showed, the smallest gain since November and less than a median forecast for a 1.1 percent increase.
Enlarge image Japan Consumer Prices Fall 0.2% in Sign of Deflation Struggle

A slowing global economy is clouding Japan’s growth prospects by weakening overseas demand for goods from cars to televisions just as a strengthening yen reduces profits. Photographer: Kiyoshi Ota/Bloomberg

Japan is relying on domestic spending to support growth as global demand weakens and the boost from earthquake reconstruction work lessens. Finance Minister Jun Azumi says the government will weigh the need for fiscal stimulus after gross domestic product figures due Aug. 13, while former Ministry of Finance official Takatoshi Ito is calling for the central bank to buy euro bonds to weaken the yen.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza