Business & Economy

Japan posts 2nd consecutive CPI decline in May

Tokyo, June 19 (efe-epa).- Japan’s consumer price index (CPI) declined by 0.2 percent in May compared to a year earlier, its second consecutive decline due to the coronavirus pandemic, according to data released by the government on Friday.

The decline in the indicator, which excludes fresh food prices due to their volatility, shows the downward pressure caused by the pandemic and the fall in international crude oil prices.

This development of the indicator comes after the CPI recorded another year-on-year decline of 0.2 percent in April, the first time in three years and four months that the indicator slipped into deflation.

Compared to the previous month, prices remained flat in May, according to data published by the Statistics Bureau of the Ministry of Internal Affairs and Communications.

The 10.4 percent decrease in the cost of education was the steepest among the components of the indicator, followed by a 2.2 percent decrease in electricity, fuel and water.

This was due to lower prices of crude oil and other fuels and the impact on the country’s education sector of measures to contain the pandemic, and in particular the closure of all schools in Japan from early March to mid-May.

The sharpest increases were observed in the prices of furniture and household utensils (1.7 percent) and clothing and footwear (1.4 percent).

The contraction of the index has kept out of reach the 2 percent inflation target set by the Bank of Japan (BoJ), which launched a monetary easing program in 2013 to achieve that objective.

Due to the impact of the pandemic on the world’s third largest economy, the BoJ estimates that in the current fiscal year, which began on Apr. 1 and will end on Mar. 31, 2021, the consumer price index will be negative at between -0.7 percent and -0.3 percent. EFE-EPA


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