Japan is perhaps not totally out of the specter of deflation. The core inflation index, which includes the price of oil but excludes prices of fresh food, increased by 2% annually.
But excluding the impact of the recovery the rate of VAT last year, remains unchanged from February 2014, thus away from the priority of the BoJ, ie an increase of 2% per year of consumer prices.
This is therefore the first month without increase since May 2013.
“Core inflation could fall by up to 0.5% before touching its low point around July and again later in the year, “said Junko Nishioka, chief economist at Sumitomo Mitsui Banking.
An absence of price rise would push the BoJ to act
The Japanese central bank warned that the oil price fall is expected to weigh on inflation during most of this year. The latest figures provide arguments in favor of increased support for the activity and credit.
Yutaka Harada recently joined the Monetary Policy Committee of the Bank of Japan and proponent of an offensive strategy easing, said Thursday that the estimated timing of a rise in inflation to 2% in two years was not rigid, which implies that it is unlikely that the BoJ to take soon new initiatives.
It remains a persistent absence of price rise signs may require it to act to avoid a return to deflation, the main scourge of the Japanese economy for nearly 20 years. Most observers believe that further quantitative easing could be announced in the second half, complementing those of last October.
Household consumption concerned
Other indicators Economic published Friday, March 27 offer little relief patterns, household consumption falling by 2.9% year on year, the seventh month of decline
Only small consolation. Labour market remains dynamic, the ratio of job offers and applications falling to its highest level in 20 years and the unemployment rate falling to 3.5%, a level that many economists believe correspond to a situation of full employment .
Also read & gt; & gt; Japan: a modest recovery disappoints
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