Japan: This Inflation Gauge Takes a Dip

In March, Japan's headline inflation rose 1% year to year, down from the 1.5% jump seen the previous month.

However, another inflation measure slipped.

Read this April 20 article excerpt from the Financial Times:

Japan's key measure of consumer inflation edged lower in March, marking the first time price growth has fallen since the country exited deflation at the start of 2017.

The core consumer price index, which excludes fresh food prices but not fuel costs, rose 0.9 per cent year on year in March, according to Japan's Statistics Bureau, in line with a median estimate from economists surveyed by Reuters and down from growth of 1 per cent in February.

Core inflation, which is the focus of the Bank of Japan's 2 per cent inflation target, rose 0.5 per cent for the whole of 2017. The gauge's rise in January of that year marked the first time prices had grown since 2015 and renewed hopes that the central bank might hit its target.

The gauge was weighed on in March by a year-on-year fall of 0.2 per cent for housing and a 1.4 per cent drop in the cost of furniture and household utensils, as well as slower energy inflation of 5.7 per cent - down from 7 per cent in February.

Elliott Wave International analysts would not be surprised if Japan's consumer inflation continued lower.

The August 2016 Elliott Wave Financial Forecast discussed Japan's unprecedented stimulus program and offered this quote along with a comment:

"If history is any guide," says Bloomberg, "this stimulus will just pile up more debt without really boosting long-term growth." That's exactly the point that Conquer the Crash, The Elliott Wave Theorist and the Elliott Wave Financial Forecast have been making.

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