Japan’s April core consumer prices fell 0.1 per cent year on year
30 May 2009
Japan's core consumer prices fell 0.1 per cent in April from a year earlier, for the second consecutive month YoY, government data showed on Friday
The core consumer prices index fell as prices of oil and other commodities fell.
The consumer prices excludes fresh food fell at the same pace of 0.1 per cent as of March, which was the first fall recorded in 18 months.
During the boom last year, the annual core consumer inflation had reached a high of 2.4 percent, when prices of goods were at its peak.
The recession has taken its toll on Asia's biggest economy but the current month's data shows that demand is picking up with companies raising production levels and consumers coming out to make purchases. Therefore it is too early to say that Japan will go into deflation for the second time.
Yesterday, Toyota Motors for the first time in six months raised the production target of Prius electric hybrid, by around 20 per cent from around 42,000 to about 50,000 units per month Last month, Toyota had raised its full year production target for the new hybrid from 300,000 to 450,000-500,000 units for 2009.
The advance orders for Prius in Japan have surpassed Toyota's expectations, which were initially pegged at 40,000 but later raised to 60,000-70,000. (See: Toyota raises production targets for Prius 2010)
Last month, Toyota Motors forecast sales in China to grow by at least a third in 2009 as global demand for fuel-efficient models are expected to pick up. Similarly, Nissan saw sales grow in China.
Exports to China also increased replacing the US as the country's main trading partner.
Japan's factory output increased in April and manufacturers are predicting further growth looking forward.
Simultaneously, Toshiba Corp also announced plans to increase production of its computer chips to the same level it was before production cuts began in January, according to Japanese public broadcaster NHK. (See: Toshiba Corp plans to increase computer chips production in July)
Japan's trade surplus for April recorded 68.95 billion yen. Exports declined 39.1 per cent in April from the previous year, a less severe decline compared to 46.5-per cent fall recorded in March, indicating that the decline is less harsh. On a seasonally adjusted basis, exports in April were up 1.9 per cent from March. (See: Japan's April trade surplus at 68.95 billion yen, exports down 39.1 per cent)
From the data released this month, exports have done fairly better in the last two months in-spite of the fall for seven consecutive months which corroborates analysts' views that exports bottomed out in February, when they plummeted 49.4 per cent. Similarly, inflation seems to be bottoming out before it picks up from here.
