Japan’s consumer prices declined 0.1 percent in a report released ahead of a central bank meeting next month, when policy makers will review adding more stimulus.
Consumer prices excluding fresh food fell 0.1 percent in May from a year earlier, the statistics bureau said in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for no change.
The Bank of Japan is under pressure to do more to help the nation shake off deflation and sustain a recovery from last year’s tsunami and earthquake. A planned increase in the consumption tax in 2014 and 2015, approved by the lower house of parliament this week, may become a drag on the economy by discouraging spending.
“Japan’s progress towards defeating deflation is very slow,” said Yoshiki Shinke, chief economist at Dai-Ichi Life Research Institute in Tokyo, before the release. “The BOJ may come under more pressure for additional stimulus because of stagnant price growth, especially when the government is coming closer to increasing sales tax.”
The jobless rate dropped to 4.4 percent in May and the number of available jobs per job applicant rose to 0.81. Household spending increased 4 percent, separate government reports also showed in Tokyo today.
Oil fell below $80 a barrel last week for the first time in eight months, contributing to Japan’s regular gasoline prices falling for a 12th week as of June 25, according to Japan’s energy agency.
Aeon Co., Japan’s biggest retailer, will lower the price of 1,000 goods because lackluster income growth and consumers’ concerns about the global economy are restraining spending, the company said June 27.