September 2021 Consumer Price Index

◆Japan’s September 2021 core CPI (excluding fresh foods) was at +0.1% y/y, the first time CPI has moved into the positive range in y/y terms since March 2020, a year and a half ago. Influenced by soaring commodity prices worldwide, non-durable consumer goods such as energy and foods (excluding fresh foods), pushed overall results in the upward direction. Meanwhile, as for new core-core CPI (excluding fresh foods and energy), the negative range marked time in comparison to the previous month at -0.5%. Prices are seen as marking time considering that energy is the major factor providing underlying support for recent core CPI results.

◆Looking at year-to-year performance by component in September, non-durable consumer goods such as “gasoline", “electricity” rates, and “beef (imported)” pushed up overall performance. On the other hand, services, which have recently become a major factor in overall downward pressure, are continuing the dynamic of downward pressure caused by telephone charges (mobile phone).

◆As for the future of Japan’s core CPI, positive and negative factors are expected to continue competing, with moderate growth continuing. Major growth factors will likely be increasing production costs for corporations due to soaring commodity prices, and the base effect of last year’s Go To Travel Campaign. Meanwhile, the lagging recovery of the GDP gap, and the influence of cuts in telephone charges (mobile phone) are expected to continue their role as factors bringing downward pressure on CPI.