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Consumer prices dip fifth month in a row

Kyodo

Consumer prices fell 0.5 percent in March compared with the previous year, logging five consecutive months of decline and underscoring deflation’s persistent grip, the internal affairs ministry said Friday.

The core consumer price index, which excludes volatile prices for fresh foods, stood at 99.5 against the 2010 base of 100, the Internal Affairs and Communications Ministry said.

The data suggest the Bank of Japan’s drastic quantitative easing and Prime Minister Shinzo Abe’s return to massive public works spending haven’t had enough time to nudge prices, some analysts said. Private-sector economists expected the drop.

By product, durable household goods dropped 10.4 percent in March, with TV prices plunging 18.7 percent, the ministry said.

But energy prices gained 2.2 percent and gasoline prices edged up 0.6 percent, thanks to the yen’s rapid depreciation and rising global commodity prices.

According to the Finance Ministry, the yen in March lost 16.1 percent of its value against the dollar on average compared with a year ago. Japan imports more than 90 percent of its energy from overseas, and a falling yen, like the one prompted by Abe’s deflation-busting strategies, usually drives up energy costs.

The core CPI for Tokyo’s 23 wards in April, an indicator of nationwide price trends down the road, fell 0.3 percent to 99.0.