Japan Consumer Prices Fall At Record Pace In June; Unemployment Climbs Further

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Consumer prices in Japan continued to fall for the fifth consecutive month in June on a year-over-year basis, with the latest decline being the steepest on record, government data showed Friday. At the same, unemployment increased further.

Data released by the Ministry of Internal Affairs and Communication showed that consumer prices dipped 1.8% year-on-year in June, faster than the 1.1% fall in the preceding month.

Core consumer prices, which exclude fresh food prices, also dropped at a record pace, by 1.7% June, following the 1.1% fall in the preceding month. Economists had expected a 1.8% decline.

In June, most of the sub groups showed decline in prices, with the steepest drop of 6.6% being in transport and communication, followed by a 5.2% fall in utility prices. Education was the only group to show a rise in prices, by 0.9%.

Month-on-month, overall consumer prices were down 0.2% in June, and core consumer prices also dropped at the same pace.

For the Tokyo Metropolitan area, consumer prices dropped 1.8% annually in July, while the core consumer prices were down 1.7%. The trend in the Tokyo region is taken as a leader indicator for conditions in the whole of Japan. Compared to the previous month, overall consumer prices fell 0.4% and core consumer prices declined 0.3%.

Meanwhile, jobless rate climbed further to hit a six-year high in June. The seasonally adjusted jobless rate climbed to 5.4% from 5.2% in May. Economists expected the rate to come in at 5.3%. This is the highest rate since June 2003, and was just short of the record 5.5% set in April 2003.

The number of unemployed persons totaled 3.48 million, an increase of 830 thousand or 31.3% from the previous year. At the same time, the number of employed persons decreased by 1.51 million or 2.3% to 63 million.

The ministry also reported that household spending in Japan increased 0.2% in real terms in June compared to one year earlier, while spending by wage earner households was down 0.9%. Economists expected the real household spending to rise 0.5%.

Consumer prices in Japan continued to fall for the fifth consecutive month in June on a year-over-year basis, with the latest decline being the steepest on record, government data showed Friday. At the same, unemployment increased further. (Market News Provided by RTTNews)