Japan CPI misses forecasts, consumption tax hike may be delayed

A lead indicator for price pressures in Japan fell short of market expectations in April, leading some analysts to caution of the risk that the world´s third largest economy might be on a slippery slope back towards deflation.

The country´s consumer price index excluding prices for fresh food retreated by 0.3% year-on-year in April, ahead of economists' forecasts for a decline of 0.4%.

However, 'core' consumer prices in Tokyo, which are widely considered to be a lead indicator for the rest of the economy, dropped at a 0.5% clip, outstripping forecasts for a fall of 0.4%.

On Thursday evening, Kyodo News reported prime minister Shinzo Abe might announce a decision to postpone an increase in the country´s consumption tax, from 8% to 10%, which was planned to come into effect in April 2017.

As of 08:11 BST dollar/yen was drifting 0.08% lower to 109.67.