This content is not available in your region

Deflation still dogs Japan

Deflation still dogs Japan
Text size Aa Aa

Severe deflation continues to add to the uncertainty over Japan’s economy. The narrowest measure of consumer inflation – which excludes food and energy prices – fell again in May at a record level; it was down 1.6 percent from a year ago.

That means consumer demand is still weak and suggests slow wage growth and a large gap between supply and demand will slow an exit from deflation.

The data runs counter to the Bank of Japan’s forecast of a slight rise in core consumer prices in the fiscal year starting next April.