Online Shopping May Be Pushing Down CPI by 0.2 Point: BOJ

June 19, 2018

Tokyo- The Bank of Japan said Monday its recent research has found that the increase in online shopping may be pushing down the country's consumer price index by up to 0.2 percentage point.

In a phenomenon known as the Amazon effect, named after U.S. giant Amazon.com Inc., conventional retailors lower prices in order to remain competitive with online shopping operators.

The BOJ is expected to discuss the research results and the trend of stagnating prices at its monetary policy meeting in July.

According to the research, it is estimated that the CPI excluding fresh food and energy prices are pushed down by around 0.1 to 0.2 percentage point due to the Amazon effect.

As for daily necessities and clothes, increasingly purchased online, prices are depressed by around 0.3 percentage point, the BOJ said.

The research paper also stated that if more women enter the workforce, Internet shopping will increase further, possibly adding pressure on retailers to lower their prices.

However, the paper also said that prices may rise if online shopping cultivates new demand. Jiji Press