Slowing Inflation Keeps Bank Of Japan Under Pressure
International Business Times
Published Jan 30, 2015 12:33AM ET
Updated Jan 30, 2015 12:45AM ET
Slowing Inflation Keeps Bank Of Japan Under Pressure
By Reuters -
(Reuters) - Japan's core consumer inflation slowed for a fifth straight month in December hit by collapsing oil prices, keeping the central bank under pressure to meet its ambitious 2 percent inflation target.
But factory output rose 1.0 percent in December helped by a much-awaited rebound in exports and manufacturers expect to increase production in January, boding well for an economy emerging from recession.
The pick-up in output backs up the Bank of Japan's argument that a solid economic recovery will help accelerate inflation toward its target early next year, although oil price falls will continue to weigh on inflation in the short run.
Excluding the effect of a sales tax hike in April last year, core consumer price index (CPI) - which excludes volatile fresh food but includes oil products - stood at 0.5 percent, just a quarter of the way in achieving the BOJ's 2 percent target.
The headline core consumer inflation rose 2.5 percent in the year to December, government data showed on Friday. That was less than a median market forecast of a 2.6 percent increase.
The increase in December output compared with a median market forecast for a 1.3 percent gain. Manufacturers surveyed by the government expect output to rise 6.3 percent in January but fall 1.8 percent in February, the data showed.
The government raised its assessment on output to say it is "picking up moderately." In the previous month, it said output was flat.
Japan's economy slipped into recession in the third quarter of last year as exports failed to pick up and last April's sales tax hike cooled consumer spending.
Analysts expect the economy to have expanded an annualized 3.2 percent in October-December as the tax-hike pain subsides, a Reuters poll showed.
In a sign the recovery will be fragile, however, household spending fell 3.4 percent in the year to December, separate data showed on Friday, more than a median market forecast.
Get The News You Want
Written By: International Business Times
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.