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Plunging phone charges another headwind for BoJ

The steep cut to mobile phone charges announced by Japan’s largest wireless operator last week means that consumer price inflation may average only 1.0% next year rather than the 1.2% we had been forecasting. While the Bank of Japan will argue correctly that this is a one-off factor that it cannot do much about, price reductions will make it even more difficult to lift inflation expectations.

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