By Toru Fujioka - 2012-05-25T01:20:58Z
Japan’s consumer prices rose 0.2 percent in April from a year earlier, showing the Bank of Japan remains distant from a 1 percent inflation target after years of falling prices.
Japan’s consumer prices rose 0.2 percent in April from a year earlier, showing the Bank of Japan remains distant from a 1 percent inflation target after years of falling prices. Photographer: Kiyoshi Ota/Bloomberg
May 25 (Bloomberg) -- Martin Schulz, a senior economist at Fujitsu Research Institute, talks about Japan's inflation, economy and summer energy demand, and the outlook for Bank of Japan monetary policy. Japan’s consumer prices rose 0.2 percent in April from a year earlier, showing the Bank of Japan remains distant from a 1 percent inflation target after years of falling prices. Schulz speaks from Tokyo with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Tomohiro Ohsumi/Bloomberg
Masaaki Shirakawa, governor of the Bank of Japan.
Masaaki Shirakawa, governor of the Bank of Japan. Photographer: Tomohiro Ohsumi/Bloomberg
Japan’s consumer prices rose 0.2 percent in April from a year earlier, the third monthly increase, showing the Bank of Japan remains distant from a 1 percent inflation target after years of falling prices.
The median estimate in a Bloomberg News survey of 29 economists was for a 0.1 percent gain in prices excluding fresh food from 0.2 percent in March. The statistics bureau released the number in Tokyo today.
Takeshi Miyazaki, a leader of the ruling Democratic Party of Japan’s anti-deflation league, renewed calls for more aggressive action after the central bank this week refrained from adding to monetary stimulus. Governor Masaaki Shirakawa reaffirmed a commitment to what his policy makers term “powerful monetary easing” after that description was dropped from a BOJ statement.
“As it becomes evident that the Bank of Japan (8301)’s inflation forecast is too optimistic, there will be more pressure on the BOJ to do more,” Kiichi Murashima, chief economist at Citigroup Global Markets Japan Inc. said in Tokyo. “For the economy to get out of deflation, a sustained rise in wages is probably necessary.”
The yen traded at 79.66 per dollar as of 10:15 a.m. in Tokyo. Japan’s currency has gained more than 2 percent in the past month as renewed concern about Europe’s sovereign-debt crisis bolstered the yen’s appeal as a safe haven.
The Bank of Japan forecast 0.7 percent inflation for the year starting in April 2013 after setting the 1 percent price target in February. That price goal could be achieved in two years, Eiji Maeda, the BOJ’s chief economist, said in an interview on May 14.
“Growth in consumer prices may reach 1 percent temporarily but it’s hard to forecast when it will achieve sustainable growth,” said Kazuhiko Sano, chief strategist at Tokai Tokyo Securities. For the central bank, “the main scenario for the next easing is July. But it could move up to June depending on developments in currencies, stocks and the global economy.”
Higher inflation has failed to feed into wages, with monthly pay only rising three months in the past year, government data show.
Rising energy costs may help to push up inflation, with Japan nuclear free for the first time in more than four decades after plant shutdowns in the aftermath of last year’s earthquake and tsunami. Tokyo Electric Power Corp. (9501) estimated this week that prices will increase 16 percent for households and 25 percent for companies.
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