Consumer prices across Japan posted a contraction for the ninth consecutive month during April, amid falling mobile phone fees and weakness in domestic demand, despite energy costs rising over the period. Data released by the government reveals that Japan’s core CPI declined by 0.1% YoY in the month of April, although the reading was better than the economists’ expectations for a 0.2% fall.

Cellphone fees declined by 26.5%, bringing down core CPI by 0.5% even though energy costs did post the first increase since January, climbing 0.7% higher YoY. The higher energy costs came on the back of rising crude oil prices worldwide in April and the contrast from the same period last year when they had fallen sharply amid the first round of lockdowns around the world.

In more worrying news for the Japanese economy, the pace of expansion in its manufacturing sector slowed down in May, amid weaker growth in new orders and output. The latest round of restrictions imposed by the government to combat the fourth wave of the pandemic underway also caused the services sector to contract at the fastest rate seen since nine months.

The au Jibun Bank Flash Japan manufacturing PMI dipped to a seasonally adjusted reading of 52.5 for May from 53.6 in the previous month, but remained above the 50-threshold indicating expansion. On the other hand, the au Jibun Bank Flash services PMI for Japan fell sharply to 45.7 in May from April’s final reading of 49.5.