Japan CPI core (all items less fresh food) slowed to 0.5% yoy in August, down from 0.6% yoy, matched expectations. All items CPI slowed to 0.3% yoy, down from 0.5% yoy. CPI core-core (all items less fresh food and energy) was unchanged at 0.6% yoy.
The CPI core reading moved further away from BoJ’s 2% inflation target. It’s expected to stay subdued in the coming months as as lower mobile phone service fees and education costs weigh on prices. Additionally, the upcoming sales tax hike (from 8% to 10%) in October may further hit consumer sentiment and weigh on underlying inflation.
