* April core CPI falls 0.1% yr/yr vs f’cast -0.2%
* Core-core CPI falls 0.2% in April yr/yr
* Drop driven partly by cuts in cellphone fees
* Weak demand seen keeping firms from passing on higher costs
TOKYO, May 21 (Reuters) – Japan’s core consumer prices slipped 0.1% in April from a year earlier to mark the ninth straight month of declines, data showed on Friday, a sign weak demand was discouraging firms from passing on rising costs to households.
The data underscores the challenge policymakers face in combating a resurgence in COVID-19 infections without hobbling an economy already lagging other major trading partners emerging from the pandemic-induced slump.
The drop in the core consumer price index (CPI), which excludes the effect of volatile fresh food costs, was smaller than a median market forecast for a 0.2% fall and followed a 0.1% decrease in March, government data showed.
The so-called core-core CPI, which excludes the effect of both volatile fresh food and oil costs, fell 0.2% in April from a year earlier, the data showed.
The decline was partly due to cuts in cellphone charges, following Prime Minister Yoshihide Suga’s call to ease the financial burden on households.
Japan’s economy shrank in the first quarter and analysts expect any rebound in April-June to be modest as new COVID-19 infections forced the government to re-introduce state of emergency curbs, hurting already weak consumption.
While robust exports have offset some of the weakness in domestic demand, companies’ reluctance to raise wages and pass on higher costs to consumers have kept inflation distant from the Bank of Japan’s 2% target. (Reporting by Leika Kihara; Editing by Sam Holmes)
