The key consumer price index fell 1.2 percent in May from a year earlier for the 15th straight monthly decline, the government said Friday, underscoring that deflationary pressure persists.
Meanwhile, the government said price levels in Yokohama in 2009 surpassed those of Tokyo’s 23 wards for the first time on record, data for which have been compiled since 1963, because food prices fell in the capital but remained almost flat in Yokohama, the Internal Affairs and Communications Ministry said.
The pace of the price decline narrowed from the 1.5 percent fall the previous month, mainly because the margin of declines in electricity prices narrowed as a result of sharp cuts the previous year and rises in other energy prices, including gasoline. Part of the decline also stemmed from high school tuition waivers.
The core nationwide CPI stood at 99.3 against the base of 100 for 2005, the Internal Affairs and Communications Ministry said in a preliminary report.
The headline reading of the core nationwide CPI, which excludes volatile fresh food prices, compares with the average market forecast of a 1.3 percent fall in a Kyodo News survey.
Regarding the core CPI index, a government official said tuition waivers at public high schools and tuition aid for private school students continued to push down the index since their introduction in April.
If the effect of the tuition waivers was excluded, the rate of decline would have been 0.6 percent, a ministry official said.
Regarding the CPI moves, the official said, “We’d like to monitor the trends of energy prices” as they are likely to continue to have a big impact on the index.
Kyohei Morita, chief economist at Barclays Capital Japan Ltd., said the pace of decline in the core CPI is likely to continue to contract, saying it “is steadily narrowing” if the impact of tuition waivers is excluded.
“Prices in resources and energy, as well as areas which are influenced by such prices, are likely to contribute to pushing up the CPI until around September,” if crude oil prices remain at the current level around $75 per barrel, Morita said.
By product, prices of heating oil surged 25.6 percent and gasoline increased 19.0 percent, while prices of laptop computers dropped 35.2 percent and flat-panel televisions fell 27.5 percent.
The regional index of consumer prices in Yokohama stood at 110.2 against the national average of 100, excluding imputed rent, while that in Tokyo stood at 110.0, followed by 107.1 in Osaka.
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