Japan Core Consumer Prices:

https://mainichi.jp/english/articles/20210618/p2g/00m/0bu/026000c

Article:

TOKYO (Kyodo) -- Japan's core consumer prices rose 0.1 percent in May from a year earlier, increasing for the first time in 14 months on climbing energy prices, government data showed Friday.

Nationwide core consumer prices, excluding volatile fresh food items, were boosted by sharper rises in gasoline and kerosene prices on the back of higher crude oil prices, according to the Ministry of Internal Affairs and Communications. The core consumer price index was down 0.1 percent in April.

Among petroleum products, which gained 15.6 percent, gasoline surged 19.8 percent and kerosene jumped 19.0 percent, the data showed.

Ideas:

A 0.1 percent increase in core prices is really not that much, but its always a trend that needs to be watched.

And the idea that any time producers or wholesalers see an increase in their prices, mostly likely they are going to "pass on" the additional costs to the next group, in the logistics chain.

Petroleum prices are very volatile, meaning the increase and decrease easily, so sometimes companies might have a difficult time estimating what their costs will be in the future.

And as the summer gets hotter and hotter, families are not going to be happy staying at home despite the suggestions by the Japanese government to not go out too much. They are going to find relief in big shopping malls and other areas to avoid running their AC's all day and all night.

Article:

Utility bills were down 0.3 percent as there is typically a delay in reflecting crude oil price moves, a ministry official said.

Still, electricity bills' decline of 2.9 percent and city gas prices' fall of 3.7 percent were smaller than their year-earlier drops.

"With a rebound from last year and recent rises in crude oil prices, the impact from the gasoline prices and electricity bills were enough to turn the core CPI positive," a ministry official said.

Ideas:

Yes there is always a delay related to changes in prices either up or down, and when consumers, such as families would begin to see changes in their utility costs.

There is still the idea that maybe many or some companies have their employees working from home, either part of the week or all of the week, so company utility costs might be lower too. 

But then that might increase the costs of home utilities costs. In an economy there are always positives and negatives related to different economic activities such as working from home, higher utility costs or working at the office, lower utility costs at home.

But even if the CPI increase, lets say 0.1 percent, an economy is very complex, and that doesn't mean there was a 0.1 percent increase in prices in all parts of the economy. 

And the idea that it only increase 0.1 percent could mean that there is not as much economic activity in the economy as needed to increase prices to a level where the economy is functioning at a good level.

Article:

Another contributor to the core CPI's rise were housing prices, up 0.6 percent on year, as insurance fees against fire and earthquakes climbed 16.4 percent as many insurance firms raised them this year reflecting increased natural disasters.

Prices of household items such as air conditioners were up as people spent more time at home amid the coronavirus pandemic, with durable goods gaining 2.3 percent.

Ideas:

if insurance fee are included in housing prices, instead of being a separate item, then its understandable why housing price might be increasing.

Japan, every year seems to be experiencing more and more natural disasters or situations. The severe flooding in the southern part of the country, the flooding in the Atami, Shizuoka, the heavy snow damage in the Nagano area last winter and so on, just to name a a few, not to mention the 2019 typhoons that hit the Chiba area.

I talked to an insurance person in Japan recently and they are also trying to figure out what to do about global warming as this is now part of the insurance industries strategies to try and figure out how to handle the global warming situation.

Yes, air conditioners no doubt are probably big sellers right now. And maybe even big screen TV's and the Olympics are now on. I wonder how many families have visited Yodobashi Camera, a large electronics store to see all of the big screen TV's on sale, or just bought one online.

Article:

Meanwhile, mobile phone fees slumped 27.9 percent, continuing their downward trend after major carriers cut data usage fees in response to government pressure.

So-called core-core consumer prices, excluding fresh food and energy items, fell 0.2 percent in May from a year earlier for the second straight month of decline.

Ideas:

Mobile phone fees, most likely, are too high, unless the government puts some kind of limit or price controls or a price ceiling on the fees as a way to either help consumers and or keep the market as competitive as possible, forcing major carriers to find ways to compete beside just having high prices.

And there is Rakuten and its entry in the mobile phone fee market which claims to offer lower prices. 

But for every economic situation there might be some positives and negatives, so it will be interesting to see if the major carriers find ways to keep their profit margins the same, for example now charging higher prices to buy the phone besides the monthly fees for the service.

Core consumer prices are always a major concern for the Bank of Japan as it is still concerned with getting inflation to the 2.0 percent level. But that might not happen anytime soon as long as consumers are being told to stay at home and not go out. 

Consumers can buy only so much online before they want and need to be out and about and yes even using money in the economy.

Have a nice day and be safe!