BoJ vexed by inflation at seven-month low - Reuters
|As reported by Reuters, Japanese core inflation remains trapped near frustratingly low levels, with the Bank of Japan (BoJ) seemingly no closer to their lofty 2% inflation target.
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The data comes ahead of the Bank of Japan’s rate review next week, where the nine-member board is seen cutting its price forecasts and warning of heightening global uncertainties.
Some analysts say core consumer inflation may grind to a halt in coming months as recent oil price falls push down gas and electricity bills, which could put the BOJ under pressure to ramp up an already massive stimulus program.
“Even discounting the oil effect, consumer inflation is weak. That’s because the current economic recovery is driven by the corporate sector and the benefits aren’t passed on much to households,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
“Consumption isn’t strong enough to convince companies they can raise prices,” he said, adding that core consumer inflation may approach zero percent around April.
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