Japan January Core CPI Flat, Keeps BOJ Under Pressure
Japan’s core consumer prices were unchanged in January from a year earlier, suggesting that persistent falls in energy costs will keep inflation well below the central bank’s 2 percent target. While falling fuel costs may be a boon for corporate profits, low energy prices suppress inflation which in turn may discourage companies from raising wages or the prices of their goods. The data underscores the challenges the Bank of Japan 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. The flat growth in the core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, matched a median market forecast, data from the Internal Affairs Ministry showed on Friday. Core consumer prices in Tokyo, which is a leading indicator of nationwide price trends, fell 0.1 percent in the year to February, the data showed.