Japan’s inflation softens in December

Japan’s core consumer prices slowed in December from the previous month partly due to a fall in housing prices and transport and communication fees.

Core consumer prices rose 0.7% for last month from a year ago, slower than the 0.9% gain in November, data from the Ministry of Internal Affairs and Communications showed. Economists had expected a 0.8% gain for the month.

November’s reading brings core consumer prices to the 24th consecutive month of increase in prices. The indicator excludes fresh food prices due to their volatility to seasonal changes.

Including fresh foods, Consumer Price Index (CPI) for all-items rose by 0.3% from a year ago. On a month-on-month and seasonally-adjusted basis, core consumer prices were lower by 0.1%, while CPI for all items fell by 0.2%.

For last month, the largest contributors to the increase in consumer prices were fuel, light, and water prices, and medical care costs.

For the full year of 2018, CPI for all items gained 1.0% year-on-year, falling below the central bank’s annual target. The Bank of Japan has been struggling to keep to its inflation target of 2.0% amid depressed wages and softening economic activity.

Economists expect the country to rebound for the last quarter of the year, as the third quarter’s performance was met with natural disasters which affected businesses.

At 11.02am Tokyo time on Friday, the Japanese Yen changed hands at ¥109.35 against the United States dollar.