TOKYO, Sep 24 (XINHUA/APP):Japan’s core consumer prices stood flat in August from a year earlier, as a record drop in mobile phone charges was offset by surges of accommodation fees and energy prices amid the damaged economy gradually recovered from the COVID-19 pandemic, government data showed Friday.
Although central banks in the United States and Europe started preparing to reduce stimulus because of the prospect of accelerating inflation, the Bank of Japan (BOJ) did not see a similar urgent and would maintain the monetary easing to reach its 2 percent inflation target.
The latest consumer price index (CPI) after a 12-month downward streak was lifted by surges in energy prices and accommodation fees.
According to the Ministry of Internal Affairs and Communications, following an increase in crude oil prices, energy prices rose 5.5 percent year-on-year with kerosene and gasoline prices surging 20.0 percent and 16.9 percent respectively.
Accommodation fees logged the sharpest increase of 46.6 percent on record from a year earlier. In late July last year, the “Go To Travel” subsidy program was launched by the Japanese government to promote local tourism, resulting in a sharp decrease in fees charged by hotel operators. The program was suspended nationnwide in late December last year amid the spread of the COVID-19.
Since major carriers started offering cheaper plans this spring under government pressure, mobile phone fees dropped 44.8 percent, logging the largest-ever decrease.
“Absent the impact of mobile communications fees, the ‘Go To’ program, and energy prices, the price trend should be positive, rather than negative,” a ministry official said.The BOJ expects the core CPI to gain 0.6 percent in the current fiscal year through March.
Toru Suehiro, a senior economist at Daiwa Securities Co., said further rises in the core CPI may be limited due to the pace of gains in energy prices has been slowing.
Suehiro said that prices in the service sector might increase with an expected recovery in demand suppressed by the pandemic. However, he added, “there is also a possibility that firms (in the service sector) will compete to capture such demand by cutting prices.”
The core-core consumer prices, which excludes fresh food and energy items, fell 0.5 percent, down for the fifth consecutive month.
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