— See Separate Table For Details Of Individual Economist Forecasts

TOKYO (MNI) – Japan’s core consumer price index for June is
expected to show a 0.5% rise from a year earlier, a third consecutive
y/y rise following +0.6% in both May and April, according to the median
forecast of economists polled by Market News International.

The Ministry of Internal Affairs and Communications will release
the CPI data at 0830 JST on Friday, July 29 (2330 GMT Thursday).

In June, the year-on-year rise in core CPI — which excludes fresh
food but includes energy — is seen slowing from +0.6% in May as the y/y
rise in energy costs decelerated and falls in prices of food excluding
perishables accelerated, economists said.

The average retail price of regular gasoline in Japan rose 7.0% y/y
in early June, slowing from +9.7% seen a month earlier, data released by
the Oil Information Center showed.

In May, higher energy and tobacco costs, compared with year-earlier
levels, continued to offset falling electronics prices.

In April, core CPI posted the first year-on-year rise in more than
two years, due to an end to the depressing effect on consumer prices
that came from lower high school tuition costs.

Going forward, core CPI is expected to take a downward lurch in
August, when the government updates the CPI base year to 2010 from 2005
and reviews the basket of goods and services used for calculating the
main consumer price measure.

The year-on-year change in Japan’s core CPI is estimated to be
pushed down by around 0.72 percentage point when the government revises
its CPI data formula next month, an annual economic report released by
the Cabinet Office on Friday said.

The Ministry of Internal Affairs and Communications will announce
monthly CPI data for a period between January 2010 and June 2011 under
the new formula at 1700 JST (0800 GMT) on Aug. 12.

The MNI survey median forecast also showed that core CPI in central
Tokyo in July (measured in the middle of the month) is expected to have
risen 0.2% from a year earlier, a fourth consecutive monthly y/y gain,
following +0.1% in June, +0.1% in May and +0.2% in April, which was the
first y/y rise in 25 months.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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