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Japan's consumer prices rise 0.7% in September

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(Globalpost/GlobalPost)

Japan's consumer prices rose 0.7 percent in September from a year earlier for the fourth straight month of increase due to higher electricity and gasoline prices as well as increases in some durable goods prices, the government said Friday.

Durable goods prices largely posted narrower margins of decline, with some items showing increases, helping push up consumer prices excluding food and energy to a flat level from a year before to move out of negative territory for the first time since December 2008.

The core consumer price index excluding fresh foods stood at 100.5 against the 2010 base of 100, the Ministry of Internal Affairs and Communications said. But the rise in the core CPI in September was smaller than a 0.8 percent increase in August, due to a smaller gain in energy prices, the ministry said.

Gasoline prices climbed 9.0 percent, while electricity prices rose 7.6 percent. Prices of some durable goods increased, with those of notebook personal computers rising 12.4 percent and air conditioners gaining 4.3 percent.

Prices of recreational durable goods including televisions rose 0.4 percent, following a 0.1 percent increase the previous month, while those of household durable goods fell 4.5 percent due to a drop in prices of such items as refrigerators, but the figure was narrower than a 5.0 percent decline in August.

As for prospects, a ministry official said a price uptrend is likely to remain intact in October.

Despite the upward momentum in consumer prices, however, many economists believe it remains difficult for the Bank of Japan to achieve its 2 percent inflation target in about two years after introducing ultraeasy monetary policy in April this year.

Yuichiro Nagai, an economist at Barclays Securities Japan Ltd., said the rise in core CPI is largely attributable to high energy prices and effects of a weak yen which pushes up import prices, while the achievement of the 2 percent target requires a gain in services prices, desirably as a result of wage increases.

Though current moves of prices are in line with the BOJ's expectation, "We expect the BOJ to revise down its CPI projection in April as its divergence with the actual path will have widen by that time," prompting the central bank to further ease monetary policy, Nagai said.

The core CPI for Tokyo's 23 wards in October, which indicates nationwide price moves down the road, rose 0.3 percent to 99.7, marking the sixth consecutive monthly gain.

==Kyodo

http://www.globalpost.com/dispatch/news/kyodo-news-international/131024/japans-consumer-prices-rise-07-september