Japan remains firmly entrenched in deflation, despite the efforts of the Bank of Japan and Shizo Abe’s government.
According to data released by the government on Friday, headline consumer price inflation (CPI) fell by 0.4% in the 12 months to June, unchanged from levels seen in May.
Core CPI, that which excludes fresh food prices, fell by an even larger margin, recording an annual decrease of 0.5%. It was the largest year-on-year decline since March 2013, and was below expectations for an unchanged reading of -0.4%.
Core CPI in Tokyo, released one month in advance of the national figure, fell by 0.4% from July 2015, something that was higher than the 0.5% decline seen in June and expectations for an unchanged reading in July.
So-called “core-core” inflation, excluding food and energy costs and more akin to readings used in other major nations, rose by 0.4% in the year to June, decelerating from the 0.6% pace seen in May.
Basically, it was weak across the board.
Alongside the CPI release, the government also released industrial production, unemployment, retail sales and household spending figures for June, with the data coming in mixed.
Markets now await the release of the Bank of Japan’s July monetary policy decision due out sometime Friday afternoon. Further monetary policy easing is expected, although no one is entirely sure what exactly the BOJ will do.
The announcement could be released anytime after 1pm AEST.