Tokyo core consumer prices stop falling for first time in 13 months

[TOKYO] Core consumer prices in Tokyo stopped falling for the first time in over a year in August, data showed on Friday, underscoring the chance that nationwide inflation will perk up in the coming months on a recovery of domestic demand remained.

The core consumer price index (CPI) for Japan's capital, which includes oil products but excludes fresh food prices, was flat in August compared with a year earlier, government data showed.

That compared with a median market forecast for a 0.2 per cent fall.

It followed July's 0.3 per cent year-on-year drop, which was revised down from a 0.1 per cent rise.

Tokyo core CPI saw its last year-on-year rise in July last year, when the index gained 0.4 per cent.

The flat reading in the Tokyo index, which is considered a leading indicator of nationwide price trends, was held up by higher prices of overnight hotel stays and household goods, due partly to the base effect of last year's pandemic-driven slump.

The Bank of Japan's years of heavy money printing has failed to bring inflation to its 2 per cent target as companies are hesitant to pass on higher costs to households in part due to weak consumer sentiment.

Nationwide consumer inflation has barely risen even as other major economies, such as the United States, are starting to worry about the risk of too-high inflation as their economies do away with pandemic-induced lockdowns.

REUTERS