Jan. 27 (Bloomberg) -- Japan’s consumer prices fell for a third month as an export slump and the stronger yen weighed on the nation’s economic rebound from the record March earthquake.
Consumer prices excluding fresh food dropped 0.1 percent in December from a year earlier, the statistics bureau said today in Tokyo, matching the median estimate of 27 economists surveyed by Bloomberg News.
Slower global growth and a yen that remains near a postwar record against the dollar are weakening exports, eroding corporate profits and making it more difficult for the world’s third-largest economy to shake off deflation. The Bank of Japan this week lowered its outlook for consumer prices for the year ending March 31.
“We can’t foresee the end of deflation,” Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, said before the report. “Consumer prices face downward pressures from European debt woes and a strong yen and there are a lot of uncertainties ahead.”
Exports fell for a third month in December, reinforcing the view that the rebound from earthquake is fading. The yen was at 77.46 per dollar as of 8:35 a.m., compared with the postwar high of 75.35 touched on Oct. 31.
The BOJ lowered its consumer price forecast to a 0.1 percent decline for fiscal 2011 and trimmed its growth projection to 2 percent from the previous 2.2 percent for the year starting April 1.
--With assistance from Minh Bui, Theresa Barraclough and Masahiro Hidaka in Tokyo. Editor: Lily Nonomiya, Chris Anstey
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