Tokyo posts slower consumer price drop in March

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.