Japan consumer prices fall for fifth straight month, heightens pressure on BoJ to ease

Consumer prices in Japan fell for the fifth straight month in a row, heightening monetary pressure on the Bank of Japan to ease interest rate in September’s monetary policy meeting. Also, latest inflation figures remained well below the central bank’s target band.

Japan's core consumer prices fell 0.5 percent in July from a year earlier, government data showed on Friday. The core consumer price index, which includes oil products but excludes fresh food prices, that compares with economists' median estimate for a 0.4 percent annual fall.

Further, the so-called core-core inflation index, which excludes food and energy prices and is similar to the core index used in the United States rose 0.3 percent in the year to July. Core consumer prices in Tokyo, available a month before the nationwide data, fell 0.4 percent in August from a year earlier, versus a 0.3 percent annual fall seen by analysts in a Reuters poll.

In addition, consumer prices excluding fresh food, the Bank of Japan’s core gauge, dropped 0.5 percent in July from a year earlier, compared to an estimate of -0.4 percent.

Meanwhile, in the wake of Prime Minister Shinzo Abe’s sweeping upper house election victory in July, the Japanese leader is looking to expand his so-called Abenomics program, and will likely do so this fall.