Apr 25 (Japan Times) - Japan’s core consumer inflation eased in March for the second straight month, underscoring fears that slumping oil costs and soft consumption because of the COVID-19 pandemic might push the country back into deflation.
The data, released Friday, comes just ahead of the Bank of Japan’s policy meeting on Monday, at which sources have said the bank will sharply cut its growth forecasts and take further steps to ease funding strains on firms affected as the new coronavirus that causes the disease continues to spread.
The crisis has further dented an economy already on the cusp of recession by keeping citizens home and forcing shops to shut down, distracting the BOJ from its efforts to achieve its elusive 2 percent inflation target.
The core consumer price index, which includes oil products but excludes volatile fresh food prices, grew 0.4 percent in the year to March, government data showed, matching the median market forecast. It was slower than a 0.6 percent increase in February.
“The data suggests that underlying inflation has been weakened by declining energy costs, and the trend will accelerate given falling oil prices,†said Masaki Kuwahara, senior economist at Nomura Securities.
