Japan's CPI flat in Jan. as deflationary pressures still weigh

Japan's consumer prices remained flat in January compared to the same period a year earlier, the Ministry of Internal Affairs and Communications said in a report on Friday.

The consumer price index (CPI) reading in the recording period, which excludes volatile fresh food prices, stood at 102.6 against the 2010 base of 100, the statistics bureau said.

The latest reading follows a negligible 0.1 percent rise in the previous two months, underscoring the Bank of Japan's (BOJ) struggle to combat deflation and achieve its 2 percent target, despite unrolling a number of quantitative easing measures.

Such measures, most recently, included the BOJ plunging its interest rate into negative territory in a bid to shore up the economy which contracted in the last quarter, as falling oil prices, waning domestic consumption and sluggish imports, continue to impact overall growth and the bank's reflationary efforts.

Some analysts noted Friday that the corporate goods price index in Japan, on a monthly, quarterly and annual basis, is being more comprehensively tracked by the BOJ and finance ministry of late, as these supply-side price pressures and decreases in the index often precede a downward movement in Japan's CPI.

If a drop in the CGPI is followed by a decrease in the CPI, mounting concerns about deflation may prompt the BOJ to unroll more monetary easing measures, with economists Friday saying this may be imminent, with the central bank possibly opting to further lower its interest rate into negative territory. Endit