Japan’s Core CPI Sees Fastest Decline in Almost Four Years - Forex News by FX Leaders
Japan's Core CPI Sees Fastest Decline in Almost Four Years

Japan’s Core CPI Sees Fastest Decline in Almost Four Years

Posted Friday, September 18, 2020 by
Arslan Butt • 1 min read

Core consumer prices across Japan declined at the fastest rate in nearly four years during the month of August, mostly on account of the government’s scheme to offer discounts to spur domestic travel and boost the country’s ailing tourism industry. According to data released by the government, Japan’s core CPI fell by 0.4% YoY in August, in line with economists’ expectations.

The core CPI reading was worse than that of the previous month when it stood at zero. The steep fall was driven by a reduction in prices of accommodation and and hotels due to the national travel discounts offered by the government.

Meanwhile, the core core CPI, which excludes volatile food and energy prices, declined 0.1% during August after gaining by 0.4% in July. This marks the first decline in core core CPI seen since March 2017.

While the reopening of the economy is expected to drive recovery, a cautious sentiment lingers among consumers and businesses, which are likely to exert downward pressure on prices in the near future. The heightened economic uncertainty due to the coronavirus pandemic is likely to keep demand weak and keep CPI readings from inching higher.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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