Update) Japan Core CPI Falls to 17-Year Low in July

Tokyo, Aug. 27 (Jiji Press)--Japan's core consumer price index for
July fell 1.1 pct from a year before to hit the lowest level in some 17
years, the Internal Affairs and Communications Ministry said Friday.
The core CPI, which excludes fresh food prices, stood at 99.0
against 100 for the base year of 2005, the lowest since March 1993. The
index extended its losing streak to a 17th month.
The pace of fall, which matched the median forecast among 26
economic research institutes polled by Jiji Press, was faster than the 1.0
pct decline in June, showing the first acceleration in three months, mainly
because of a slowdown in the growth rate for gasoline prices.
Compared with June, the index was down 0.3 pct.
The overall CPI, including fresh food prices, was down 0.9 pct from
a year before at 99.2 after dropping 0.7 pct in the previous month.
The CPI falls also reflected the government program to scrap or
sharply cut high school tuition fees and continued declines in the prices of
air conditioners, television sets and personal computers.
Meanwhile, gas rates rose year on year for the first time in 13
months.
Consumer prices may take longer than expected before starting to
post growth, due to such factors as Tokyo Electric Power Co.'s <9501>
reported plan to cut its electricity rates, said Yasunari Ueno, chief market
economist at Mizuho Securities Co.
The Internal Affairs Ministry also said that the core CPI for
Tokyo's densely populated 23 wards in August fell 1.1 from a year before to
98.6 following a 1.3 pct drop in the previous month. Month on month, the
index was up 0.2 pct.
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