Japan-style CPI slowed 1.1% y-o-y in July

Declines in energy prices were pinpointed.

August inflation readings in Japan came in slightly weaker than expected, and stripping out the impact of the April VAT hike, Japan-style core inflation (CPI ex fresh food) slowed to 1.1% y-o-y, from 1.3% in July.

According to a research note from HSBC Global Research, this was on the back of further energy price declines.

Based on the latest Tokyo CPI report, the report expects Japan-style core CPI growth to fall to 1.0% y-o-y in September.

But near-term easing by the Bank of Japan remains unlikely; the renewed bout of yen weakness should help prevent core inflation from dipping materially below 1%.

The report noted that it continues to see the earliest timing of additional BoJ stimulus as April 2015.