Declines in Japan’s key inflation gauge eased in January after rising numbers of infections with the novel coronavirus forced the government to suspend a tourism discount program that had been hitting prices for months.
Consumer prices excluding fresh food fell 0.6% from a year earlier, improving from a 1% drop in December that was the steepest in a decade, the internal affairs ministry reported Friday. The result matched the median forecast from economists, with the drop moderating before next month’s Bank of Japan policy review.
Prices actually gained once energy costs were also excluded from the calculation. That, combined with the smaller drop in the core index, supports BOJ Gov. Haruhiko Kuroda’s view that recent price weakness has been largely due to temporary factors including softer oil markets and government discounts to help the hard-hit tourism industry.
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