Reply #6: BOJ officials say rise in CPI within expectations [View All]

TOKYO, March 3 (Reuters) - A 0.5 percent rise in Japan's January core consumer price index (CPI) -- a key benchmark for monetary policy -- was within expectations, Bank of Japan sources told Reuters on Friday. The third straight month of year-on-year gains in the core CPI, excluding volatile fresh food prices, shown by government data on Friday bolstered speculation that the central bank could scrap its ultra-easy monetary policy as early as next week.
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Another encouraging sign is that CPI excluding fresh food, medical services, rice, cigarettes, petroleum products, electricity charges and telephone charges -- dubbed by BOJ Deputy Governor Kazumasa Iwata the "core core CPI" -- probably rose by around 0.1 percent in January from a year earlier, BOJ sources said. "If this index turns positive, (consumer prices) will not easily fall again," a senior BOJ official said.

The more narrowly defined index that excludes factors such as utility prices and fuel costs is not an official yardstick for the BOJ in making policy decisions, but is seen as a useful indicator for gauging underlying price trends.

The government does not release the "core core CPI" in its official data, and the BOJ sources said they were making a final analysis by using Friday's consumer price data. ...a bit more...

Japan's PM sees end to deflation
(BBC) Japanese Prime Minister Junichiro Koizumi says he believes an end to deflation in Japan's troubled economy is finally in sight. "We are seeing signs of getting out of deflation," Mr Koizumi told a parliamentary committee on Friday.
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Mr Koizumi latest comments are the most upbeat yet, as previously he had insisted that it was too soon to say whether Japan had recovered from deflation.
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However, economic ministers have urged caution for fear that a premature move by the Bank of Japan could jeopardize the economy's recovery. Finance Minister Sadakazu Tanigaki said Japan was still experiencing "mild deflation", an opinion backed up by Economic and Fiscal Policy Minister Kaoru Yosano. ... not much more...