Amazon effect: BOJ says online shopping pushing down core inflation

Amazon.com's logo is seen at Amazon Japan's office building in Tokyo, Japan, August 8, 2016. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO: The spread of online shopping in Japan is dragging down consumer inflation, the central bank said, highlighting the “Amazon effect” on prices and the challenges policy makers face as they try to pull the world's third-biggest economy out of years of stagnation.

As bricks-and-mortar retailers lower prices to remain competitive with online shops, core consumer prices are being pushed down by 0.1 to 0.2 percentage point, the Bank of Japan said in a research paper on June 18.