* Dec core CPI -0.2 pct yr/yr, matching median forecast
* Long way to achieve BOJ's new inflation goal of 2 pct
* BOJ to stay under political pressure to end deflation
By Kaori Kaneko
TOKYO, Jan 25 Japan's core consumer prices
slipped for a second straight month in the year to December,
signalling the economy was still in deflation and piling more
pressure on the central bank to adopt further stimulus steps to
achieve its new inflation target.
Falls in consumer prices came after the Bank of Japan on
Tuesday doubled its inflation target to 2 percent and decided to
adopt an open-ended commitment to buying assets next year to
revive the economy.
The 0.2 percent annual decline in core consumer prices in
December matched a median estimate from analysts and followed a
0.1 percent decline in the year to November.
The so-called core-core inflation index, which excludes food
and energy prices and is similar to the core index used in the
United States, fell an annual 0.6 percent.
Many analysts expect Prime Minister Shinzo Abe will continue
to call for bold stimulus steps by the central bank to help the
economy pull out of nagging deflation, at least in the run up to
an upper house election expected this summer.
"Upward pressure on prices was weak in December, but we can
expect price declines to narrow as the yen has weakened and this
will eventually push up oil and gasoline prices," said Shuji
Tonouchi, senior fixed income strategist at Mitsubishi UFJ
Morgan Stanley Securities.
"The BOJ's additional easing won't start until next year,
but we could see the BOJ consider some new steps once the
government appoints the next BOJ governor and deputy governors."
Core consumer prices in Tokyo, available a month before the
nationwide data, declined 0.6 percent in the year to January,
compared with a 0.5 percent annual fall projected.
The BOJ's new economic forecasts showed this week core
consumer prices will fall 0.2 percent in the current fiscal year
and up 0.4 percent for the next fiscal year starting from April.
The world third-largest economy logged a record trade
deficit in 2012 as Europe sovereign debt trouble and territorial
spat with China dampened exports. But manufacturers' sentiment
improved in January and it is expected to rebound further in
coming months helped by recent softness in the yen and Abe's
aggressive fiscal and monetary policy.
Analysts expect the economy will grow 1.8 percent in the new
fiscal year as the new government's stimulus spending,
expectations of further monetary policy easing and the yen's
retreat will help the economy.
But many economists warn the stimulus could give the
sluggish economy only a temporary jolt if the government fails
to follow through with politically more difficult economic