Japan’s core consumer price index (CPI) rose for the third straight month in March, following 12 months of contraction, although the uptick was slightly less than expected.
The core CPI, which excludes the cost of fresh food, rose 0.2% y/y in March as opposed to the expected figure of 0.3%. February print was 0.2%. Core CPI, which excludes both food and energy dropped 0.1%, compared to 0.1% growth seen in February.
The fact that the core CPI stalled in March adds credence to the peak inflation argument and BOJ’s downward revision of the FY 2017/18 core CPI forecasts.
Spending continues to fall
Household spending contracted 1.3% y/y in March, which was a slight improvement following February’ 3.8% fall. The markets were expecting a drop of just 0.3% in March. Meanwhile, job-to-applicant ration inched higher to 1.45; the highest level since 1974.