Japan's consumer prices fell by 0.4% year on year in April 2021, according to data from the Ministry of Internal Affairs and Communications Friday.
This followed a 0.2% drop in March.
"This was the seventh straight month of fall in consumer prices, as a resurgence of COVID-19 cases weighed on household spending. Costs continued to drop for transportation and communications, fuel, light and water charges and medical care," the ministry said.
Food prices fell 1.2%, the most in more than two years, the data showed. Prices went up for housing, furniture and household utensils, recreation and education, it said.
"On a monthly basis, consumer prices also fell 0.4%, the first drop in four months, following a 0.2% gain in March. Core consumer prices in Japan decreased 0.10% in April 2021 over the same month in the previous year," the the Statistics Bureau added.
The data suggested weak demand and higher costs will weigh on a fragile economic recovery, experts said Friday.
"Inflation fell in April but that was almost entirely due to a plunge in mobile phone tariffs," according to Tom Learmouth, Japan economist at Capital Economics.
"Looking past temporary distortions, we think underlying inflation will continue to rise a bit further, though unlike in some other advanced economies."
"When it comes to inflation there's none of it to worry about in Japan," Mitsubishi UFJ Research & Consulting chief economist Shinichiro Kobayashi told Bloomberg News. "Raising prices now could be a fatal mistake for Japanese companies even with soaring commodity prices. It's a very different situation from the U.S."
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Japan bucking the global trend of rising inflation means the country may break from the policy stance of other major economies and further weaken the yen <a href="https://t.co/JvFy2ySEDa">https://t.co/JvFy2ySEDa</a></p>— Bloomberg Australia (@BloombergAU) <a href="https://twitter.com/BloombergAU/status/1395596443805749250?ref_src=twsrc%5Etfw">May 21, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
