Japan's core consumer prices were stubbornly unchanged in July, dashing hopes for a modest rise as the coronavirus pandemic hit household demand and revived fears of a national plunge back into deflation.
More weak data will reinforce expectations for a sharp contraction in the world’s third-largest economy this quarter due to the fallout from the pandemic, Reuters reported.
Exports are expected to have fallen 26.1 percent in May from a year earlier, the steepest drop since September 2009 when they tumbled 30.6 percent, according to the median forecast from the poll of 17 economists. Exports declined 21.9 percent in April.
“Although there is some movement to re-open economic activities in the United States and Europe, exports of transport machinery and capital goods fell significantly due to weak auto sales and declines in capital spending,” Yusuke Shimoda, senior economist at Japan Research Institute, said.
The poll forecast a 20.4 percent decline in imports in May from a year earlier, following a revised 7.1 percent fall in April.
That implied a trade deficit of 1.07 trillion yen ($9.99 billion) in May.
The finance ministry will publish the trade balance data at 8:50 a.m. on Wednesday.
The nationwide core consumer price index (CPI), which excludes volatile fresh food prices but includes oil costs, likely dipped 0.1 percent in May from a year earlier, according to the poll’s median forecast. It would be second consecutive month that prices have fallen on a year-on-year basis.
In April, the core CPI fell 0.2 percent, which was the first year-on-year decline since December 2016.
“Consumer spending tumbled as people refrained from going out and their movements were also restricted. Downward pressure on prices has increased,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
The government will announce core CPI at 8:30 a.m. on Friday.
Analysts in the poll forecast the Bank of Japan would keep its policy interest rate at minus 0.1 percent, and the 10-year Japanese government bond yield target at around 0 percent when it holds a policy meeting on June 15-16.
Venezuela’s President Nicolas Maduro said fuel prices would increase starting in June, a historic policy shift after decades of subsidies that have allowed Venezuelans to essentially fill their tanks for free.
Consumer prices in Japan's capital city fell for the first time in three years in April and national factory activity slumped, data showed on Friday, increasing worries the coronavirus pandemic could tip the country back into deflation.
OPEC and allies led by Russia agreed on Sunday to a record cut in output to prop up oil prices amid the coronavirus pandemic in an unprecedented deal with fellow oil nations, including the United States, that could curb global oil supply by 20%.
Oil prices were steady on Tuesday, hanging onto gains from the previous session, after comments from the United States and China kept alive hopes that the world's two largest economies are soon to agree on ending their trade war.
South Korean steelmakers are raising the prices of their steel products to reflect increased costs of raw materials, industry sources said Monday, though the price hikes are likely to be lower than expected.