— Japan Sep Core CPI -0.1% Y/Y; MNI Median Forecast -0.2%
— Central Tokyo Oct CPI -0.4% Y/Y; MNI Median Forecast -0.5%
— Japan Sep CPI Energy Costs +4.3% Y/Y Vs Aug +0.9%
— Japan Sep CPI TVs -4.7% Y/Y Vs Aug -7.1%
— Japan Sep CPI Recreational Durable Goods -9.9%; Aug -10.1%

TOKYO (MNI) – Japan’s core consumer prices posted a fifth straight
year-on-year drop in September but the pace of decline decelerated
thanks to higher electricity charges and fuel costs, data released
Friday by the Ministry of Internal Affairs and Communications showed.

The core reading, which excludes perishables but includes energy,
fell 0.1% last month from a year earlier following a 0.3% dip in August.

The result was slightly better than the median forecast for a 0.2%
decline in a MNI survey but mild deflationary pressures from consumer
electronics and some services lingered.

The Bank of Japan is widely expected to conduct further easing next
week in order to help the economy overcome deflation and recover from
slower global demand.

Meanwhile, total national CPI declined 0.3% on year in September,
marking a fourth straight drop after falling by 0.4% in the previous
month.

Prices of consumer durable goods, led by TVs, dropped 9.9% in
September from a year earlier after a 10.1% drop in August, pushing down
the total CPI by 0.12 percentage point.

Prices of TVs alone fell 4.7% last month, with the pace of decline
decelerating from -7.1% in August but accelerating slightly from – 4.2%
in July.

By contrast, overall energy costs in September jumped 4.3% from a
year earlier, up from a 0.9% rise in August.

Gasoline prices rose 1.8% on year last month following a 6.0% drop
in August while electricity charges gained 7.3%, up from +5.5% in the
previous month.

National CPI excluding food and energy, or the U.S.-style core CPI,
dropped 0.6% y/y in September following a 0.5% fall in August.

Central Tokyo core CPI fell 0.4% on the year in October after a
0.4% drop in the previous month. It came in slightly better the MNI
survey median forecast for a 0.5% fall.

CPI figures date to 1970 under the 2010 base year.

The BOJ increased the size of its asset-buying program by Y10
trillion to Y80 trillion on Sept. 19. At its Oct. 30 meeting, the
central bank is expected to consider raising the target for the fourth
time this year.

After stripping the expected impact of a sales tax hike planned in
April 2014, the year-on-year rise in core consumer prices is most likely
to fall short of the BOJ’s longer-term goal of 1% in that fiscal year,
given falling prices of electronics and competition among retailers to
lure customers.

The latest government survey on consumer confidence indicated
public inflation expectations were relatively balanced.

The percentage of people forecasting higher prices in a year’s time
stood at 62.3% of the total on an unadjusted basis in September, up from
62.0 % in the previous month. The percentage of people expecting lower
prices was 6.4% last month, also up from 6.1% previously.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4821 **

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