(Bloomberg) -- Microwave ovens are among the few items still heating up in in Tokyo, with a likely extension of Japan’s state of emergency set to keep demand simmering.
Tokyo Inflation Goes Negative for the First Time Since 2017
While consumer prices excluding fresh food across the capital fell for the first time in three years in April, microwave prices jumped 29% from a year earlier following a record 42% leap in March. Oven prices had fallen in 36 of the past 37 years.
Demand for microwaves has rocketed as more Tokyo residents work and eat at home amid requests from the metropolitan government to stay put to avoid the spread of coronavirus infections.
“Supply restraints and factory shutdowns may also be affecting the price of some home electric devices,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute. “Prices will naturally rise if many people want to buy these items under the emergency circumstances. But over the longer term prices overall are likely to weaken.”
The Bank of Japan on Monday slashed the lower end of its range of inflation forecasts for the year through March 2020 from 1% to -0.7% to reflect crashing oil prices and feeble demand as the economy takes a huge hit from the virus.
Other price points in the Tokyo data showed that the travel industry was one of the hardest hit by Covid-19. Prices of hotel accommodation slipped 7.7% in April, the largest drop on record for data going back to 1971. Overall core Tokyo prices fell 0.1%, intensifying concerns over a possible re-emergence of deflation.
©2020 Bloomberg L.P.
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