— Japan Dec Core CPI -0.1% Y/Y Vs MNI Median Forecast -0.1%
— Japan Dec CPI Posts 3rd Straight Y/Y Drop; Nov -0.2%
— Central Tokyo Jan CPI -0.4% Y/Y Vs Dec -0.3%
— Japan 2011 Average Core CPI -0.3%, 3rd Drop In Row
— Japan Dec CPI Energy Costs +6.9% Y/Y Vs Nov +6.7%

TOKYO (MNI) – Japan’s core consumer prices fell 0.1% on year in
December, posting the third straight drop as global demand slows and the
strong yen keeps import costs down, data released Friday by the Ministry
of Internal Affairs and Communications showed.

The December core reading matched the median economist forecast for
-0.1% in a Market News International survey.

In July 2011, Japan’s core CPI, which excludes perishables but
includes energy, posted the first year-on-year gain since December 2008,
but after two more months of rises the key inflation measure slipped
back into negative territory.

Total national CPI fell 0.2% on year in December after falling 0.5%
in November, also marking the third straight y/y drop. Markdowns in TVs
and refrigerators outpaced gains in gasoline prices.

Overall energy costs in December rose 6.9% from a year earlier, up
from rises of 6.7% in November, 6.1% in October and 6.4% in September.

National CPI excluding food and energy, or the U.S.-style core CPI,
dropped 1.1% in December following a 1.1% decline in November.

For the whole of 2011, the core CPI fell an average 0.3%, marking a
third straight year of price drops, following declines of 1.0% in 2010
and 1.3% in 2009.

Continued declines in prices of consumer electronics as well as
government subsidies for high school education depressed prices
last year while prices of cigarettes and energy costs posted gains.

Meanwhile, central Tokyo core CPI slumped 0.4% in January following
a 0.3% drop in December.

CPI figures date to 1970 under the 2010 base year.

The latest government consumer confidence survey released earlier
this month indicated a slight setback in inflation expectations.

The percentage of people forecasting higher prices in a year’s time
slumped to 61.3% of the total on an unadjusted basis in December, down
from 65.0% in the previous month, according to the survey compiled by
the Cabinet office.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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