The Japanese Consumer Prices Fell For The Third Month

The Japanese consumer prices index fell for the third consecutive month, where the nation's exports weakened as a result for the ongoing yen's appreciation that contributed in interrupting the nation's economic rebound from March's earthquake.

As, the Japanese national annualized CPI for December rose to -0.2%, compared with the prior reading of 0.5%, yet it came in line with expectations of -0.2.

Also, the Japanese annual CPI excluding food and energy for December remained unchanged at -1.1%, as it came in line with both of the prior and expectation reading of -1.1%.

On the other hand, the Japanese annualized CPI excluding fresh food for December rose to -0.1%, compared with the prior reading of -0.2%, yet it came in line with expectations of -0.1.

Additionally, sales of winter clothing and cars helped the Japanese retail sales to rebound, as it rose 2.5% in December from a year earlier of 2.3%, the climb was greater than expectations of 2.1%.

Moreover, the unceasing yen's appreciation along with slowdown in global growth are weakening the nation's exports, eroding corporate profits and making it more difficult for the world's third-largest economy to recover from the deflation.

Earlier this week the Bank of Japan governor Masaaki Shirakawa and his policy-board members lowered their economic forecast for 2012 to 2% from October's estimates of 2.2%, also the BoJ maintained its projection for consumer prices to rise 0.1%.

On the other hand, the Bank of Japan kept its asset-buying fund at 20 trillion yen ($260 billion), and its credit-lending program at 35 trillion yen to sustain the companies' growth, yet it expects that the economy will recover slowly, along with keeping the benchmark interest rate in line with forecasts, where the BoJ held it in a range of zero to 0.10%.

Moving to the nation's currency, as the USD/JPY pair is showing a huge fluctuation directly after the release of the CPI figures, where it's currently trading around the level of 76.34, after it recorded its highest price at 77.48 and lowest price at 77.25.