Consumer prices in Japan posted the sharpest decline in two years in March, suggesting that the central bank is still way far from its target of attaining 2 percent inflation.
The core consumer price index, that excludes fresh food, fell 0.5 percent year-on-year in March, the Statistics Bureau said Friday. This marked the fifth straight monthly fall in prices and was faster than a 0.4 percent decline expected.
In February, the core measure recorded a fall of 0.3 percent. The CPI, that excludes food and energy, declined 0.8 percent annually in March, in line with expectations. The all-items CPI fell 0.9 percent year-on-year in March.
Food prices alone declined 2.4 percent from a year earlier and housing costs were 0.4 percent lower. Utility costs increased 2.3 percent, while transportation and communication charges fell 0.2 percent.
The core CPI for Tokyo, a precursor to national price trends, fell 0.3 percent year-on-year in April. Economists had forecast a 0.4 percent fall. Excluding food and energy, the Tokyo price index fell 0.7 percent annually as expected.
The Bank of Japan is expected to announce its monetary policy decision shortly. The central bank is also scheduled the release its latest outlook on prices and economic growth.
Earlier this month, Haruhiko Kuroda, in his first policy meeting as BoJ Governor, unveiled unprecedented stimulus aimed at ending 15 years of deflation in the country.
The bank targets to attain 2 percent inflation in two years. Most of the policymakers, however, has acknowledged that the goal may need to remain flexible as it largely depends on the future economic developments.
by RTT Staff Writer
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