— Japan Jan Core CPI -0.2% Y/Y, 23rd Drop In Row; Dec -0.4%
— Japan Jan Core CPI MNI Survey Median Forecast: -0.3% Y/Y
— Central Tokyo Feb Core CPI -0.4% Y/Y, 22nd Drop; Jan -0.2%
— Japan CPI Shows Jan Energy Costs +4.7% Y/Y Vs Dec +4.0%

TOKYO (MNI) – Japan’s national core consumer prices posted the
smallest annual decline in 21 months in January thanks to rising energy
costs, showing the economy is gradually moving out of years of
deflation, data released Friday by the Ministry of Internal Affairs and
Communications showed on Friday.

The nationwide core CPI (excluding perishables) fell 0.2% in
January from a year earlier, posting the 23rd straight y/y drop, but the
pace of decline decelerated further from -0.4% in December, due also to
the tobacco tax hike that took effect on Oct. 1.

The January reading was the smallest since April 2009, when the
core CPI dipped 0.1% y/y.

The decline was led by markdowns in durable goods such as consumer
electronics and continued drops in high school tuition after the
government began providing subsidies last April.

The core CPI, which excludes fresh food but includes energy, showed
a smaller-than-expected drop in January, compared the median forecast of
-0.3% by economists polled by Market News International.

Total national CPI, meantime, was flat in January from a year
earlier after being unchanged in December and rising 0.1% in November.
In October, the index was up 0.2%, marking the first y/y rise since
December 2008.

Overall energy costs in January rose 4.7% following a gain of 4.0%
in December.

Meanwhile, central Tokyo core CPI fell 0.4% year-on-year in
February, the 22nd straight y/yr drop. The pace of decline accelerated
from -0.2% in January due largely to lower rents and the lingering
effect of government subsidies for high school education.

Tokyo-area energy costs in the area rose 1.4% in February following
a +2.8% y/y in January.

National CPI excluding food and energy, or the U.S. style core CPI,
fell 0.6% from a year before in February, posting the 25 consecutive
month of price falls following -0.7% in January.

CPI figures date to 1970 under the current 2005 base year.

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

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