/

Prices drop 0.2% as deflation continues

Kyodo

Consumer prices fell 0.2 percent in January from a year earlier for the third straight month of decline, due mainly to a drop in household durable goods, including air conditioners, the government said Friday.

The core consumer price index, excluding fresh foods, stood at 99.1 against the 2010 base of 100, the Internal Affairs and Communications Ministry said.

The decline in durable goods prices continued to pressure overall prices, though energy prices including electricity and petroleum products rose 3.9 percent from a year earlier, due partly to the effects of the weakening yen, a ministry official said.

“The trend has remained unchanged for the last few months,” said Masahiko Hashimoto, an economist at Daiwa Institute of Research. “Everything except for energy prices basically remains in negative territory.”

But Hashimoto said the CPI could start rising from the middle of this year with manufacturers and retailers starting to pass on increased import prices to final products as the economy appears to be recovering.

By product, prices of air conditioners plunged 30.2 percent and refrigerators dropped 23.4 percent, while gasoline prices increased 4.6 percent, up from the 2.8 percent gain in December.

Air transportation fares declined 12.7 percent due to the effects of a price discount in the yearend and New Year’s holiday season, the ministry official said.

The core CPI for Tokyo’s 23 wards in February, which indicates nationwide price moves down the road, dropped 0.6 percent from a year earlier to 98.3.

Separate data showed that average monthly household spending nationwide increased an inflation-adjusted 2.4 percent in January from a year before to ¥288,934, due partly to growing communications costs amid the spread of smartphones and solid demand for home appliances.

The ministry upgraded its basic assessment from the previous month, saying household spending has started “to pick up.”

Transportation and communications-related spending grew 8.7 percent from a year earlier, and spending on furniture and household appliances increased 6.2 percent. Utility fees rose 1.7 percent because of low temperature in January.