“Japan’s consumer prices fell for the eighth time in nine months, highlighting the challenges facing the Bank of Japan (8301) in reaching a 2 percent inflation target.
Consumer prices excluding fresh food fell 0.2 percent in January from a year earlier, the third-straight decline, the statistics bureau said in Tokyo today. The result matched the median estimate in a survey of 26 economists by Bloomberg News.
While a weaker yen improves the outlook for exporters and pushes up the prices of imported energy and commodities, continued price falls show the scale of the BOJ’s challenge in achieving 2 percent inflation. Prime Minister Shinzo Abe yesterday nominated Asian Development Bank President Haruhiko Kuroda to lead the BOJ, with the prospective governor saying last month that more easing is justified for 2013.
“Companies are still far from raising prices, and consumers won’t accept it as their deflationary expectations linger,” said Azusa Kato, an economist at BNP Paribas SA in Tokyo. “There is a considerable time lag for an economic recovery to start feeding into prices.”
The BOJ will likely announce new stimulus measures as early as the first meeting under the new governor on April 3-4, Kato said. Current governor Masaaki Shirakawa and his two deputies step down on March 19….”
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