Business / Economy

Japan's core consumer prices rose 0.9% on year in April

Kyodo

Core consumer prices rose 0.9 percent in April from a year earlier due to robust demand for overseas package tours and rising energy prices, government data showed Friday.

The core consumer price index, which excludes volatile fresh food items, increased for the 28th straight month after rising 0.8 percent in March, according to the Ministry of Internal Affairs and Communications.

So-called core-core consumer prices, which exclude both fresh food and energy items, gained 0.6 percent — the largest expansion since June 2016 when they climbed 0.7 percent, the ministry said.

Still, prices continued to fall short of the Bank of Japan’s 2 percent inflation target.

In April, overseas package tour prices jumped 15.1 percent from a year before amid strong demand during the extended Golden Week holidays, between April 27 and May 6, to celebrate the succession of Emperor Naruhito.

Accommodation costs gained 3.8 percent from a year earlier on the back of an increasing number of inbound tourists to Japan, a ministry official said.

Gasoline prices rose 2.2 percent on the back of rising crude oil prices, the ministry said.

Mobile phone services bills fell 4.3 percent as some mobile phone operators lowered service fees and the price of some handsets.

“Prices rose for overseas package tours and accommodation fees amid the 10-day holidays, but consumption in the country remains too sluggish to push them up further,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.

Household income is unlikely to grow given spring management-labor negotiations this year ended in a smaller wage hike than the previous year, Minami added.

The BOJ released its quarterly price outlook in April, expecting core consumer prices to grow just 1.1 percent in fiscal 2019 through March despite six years of ultraeasy monetary policy.

GET THE BEST OF THE JAPAN TIMES
IN FIVE EASY PIECES WITH TAKE 5