Japan’s consumer price index (CPI) declined by 0.2 per cent in May compared to a year earlier, the second consecutive decline due to the coronavirus pandemic, according to data released by the government on Friday.
The decline in the indicator, which excludes fresh food prices due to their volatility, shows the downward pressure caused by the pandemic and the fall in international crude oil prices, reports Efe news.
This development of the indicator comes after the CPI recorded another year-on-year decline of 0.2 per cent in April, the first time in three years and four months that the indicator slipped into deflation.
Compared to the previous month, prices remained flat in May, data published by the Statistics Bureau of the Ministry of Internal Affairs and Communications revealed.
The 10.4 per cent decrease in the cost of education was the steepest among the components of the indicator, followed by a 2.2 per cent decrease in electricity, fuel and water.
This was due to lower prices of crude oil and other fuels and the impact on the country’s education sector of measures to contain the pandemic, and in particular the closure of all schools in Japan from early March to mid-May.
The sharpest increases were observed in the prices of furniture and household utensils (1.7 per cent) and clothing and footwear (1.4 per cent).
The contraction of the index has kept out of reach the 2 per cent inflation target set by the Bank of Japan (BoJ), which launched a monetary easing program in 2013 to achieve that objective.
Due to the impact of the pandemic on the world’s third largest economy, the BoJ estimates that in the current fiscal year, which began on April l1 and will end on March 31, 2021, the consumer price index will be negative at between -0.7 per cent and -0.3 per cent.