Tokyo, Japan’s core consumer prices dropped further in March. However, the contraction came slower than its usual pace, suggesting that an increase in fuel cost and a rebound in domestic demand will likely negate the country’s deflation threats.
The core consumer price index of Tokyo recorded an annualized 0.1% decline in March, data from the government showed. The figure came milder than the 0.2% decline expected by analysts and lower than the 0.3% contraction seen the previous month. Gasoline prices, on the other hand, tallied a 2.1% increase.
The reading had relieved the Bank of Japan as it seeks to boost the country’s inflation above its 2% target. While this signaled a rebound in oil and commodity costs, cost of living was viewed to affect consumption on struggling wage growth.