Japan Inflation Flat in August, Snaps 12-Month Decline

Source: Reuters

Japan’s inflation was unchanged year-on-year in August, following 12 straight months of declines. EWJ is down 0.36%

• Inflation was unchanged, marking the first time that core prices escaped negative territory since July 2020.
• Higher energy costs were offset by lower mobile phone fees, while lodging prices surged 46.6% after a tourism campaign discount the same month last year.
• The latest data reflected weighted mobile charge fees higher, dragging core inflation after fees fell by a record 44.8%.
• Bank of Japan Governor Haruhiko Kuroda indicated that consumer prices would have grown if not for the higher mobile phone fees.
• Analysts expect the year-on-year impact to continue until April, with the decline in domestic demand and an older population hitting demand for goods and services.
• Economists expect inflation to accelerate at a limited basis, with the central bank’s 2.0% target “unachievable.”