Consumer prices in Tokyo witnessed a year-on-year decline of 0.6 percent in May for a record 21st straight month of decline, led by lower prices in housing rents and telecom charges, the government said Friday.

The latest figure for Tokyo’s 23 wards — a leading indicator of price trends for the rest of the nation — underlines concerns that the economy is in the grip of deflation.

In May, the Tokyo consumer price index came to 100.5 against the 1995 base of 100, the Ministry of Public Management, Home Affairs, Posts and Telecommunications said in a preliminary report.

On a month-to-month basis, however, May consumer prices in the metropolis rose 0.3 percent from April, due partly to a slight increase in housing rents, the ministry said.

Excluding the volatile prices of perishables, consumer prices in Tokyo dropped 0.9 percent from a year earlier for the 20th consecutive monthly decline, with the CPI standing at 100.6 against the 1995 base of 100, the ministry said.

The Bank of Japan, which closely monitors the figures, has pledged to continue its policy of quantitatively boosting cash in the money market until the nonperishable CPI rises to at least zero. While lower prices normally benefit consumers, a prolonged fall could lead to a vicious deflationary spiral of falling corporate earnings and an economic slowdown.

Commenting on the unrelenting 21-month decline in consumer prices, the Cabinet Office observed, “Consumer prices remain on a weak trend.”

Meanwhile, nationwide consumer prices in April fell 0.4 percent from a year earlier for the third straight month of decline, with the CPI standing at 101.3.

Excluding perishables, nationwide consumer prices dropped 0.5 percent from a year before, down for the 19th consecutive month, with the CPI standing at 101.4.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.