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Japan January Core CPI Flat, Keeps Policymakers Under Pressure

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Falling fuel costs kept Japan’s core consumer prices unchanged in January from a year earlier, well below the central bank’s 2 percent target, highlighting the daunting task policymakers face in attempting to lift Japan out of stagnation.

A separate index by the Bank of Japan that strips away the effect of energy costs also showed inflation slowing, suggesting that weak consumption and falling import costs are discouraging firms from raising prices for a broad range of goods.

The data underscores the challenges the Bank of Japan (BOJ) faces, even after its shock decision last month to adopt negative interest rates, in generating a positive cycle in which rising corporate profits drive up wages and consumption.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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