TOKYO (MNI) - Japan's core consumer inflation rate fell 2.2% in October, posting the eighth straight year-on-year decline as the costs of gasoline, heating oil and overseas holiday tours continued to show sharp declines from year-earlier levels, official data released on Friday showed.

But the pace of price drops slowed slightly for the second month in a row, rising from -2.3% in September and the record -2.4% in August as the energy costs were not as far below their summer 2008 peaks than in previous months.

The core CPI, which excludes fresh food but includes gasoline and heating oil costs, has shown wide-spread declines in prices of goods and services as energy prices remain below their high levels seen a year before and retailers are cutting prices to lure customers.

Retail gasoline prices had been on a general uptrend through Oct. 5 since mid-January this year, before they began to slide again, the latest data released by the Oil Information Center showed.

The national average price of regular gasoline hit a record high of Y185.1 on Aug. 4, 2008.

Between October 2007 and December 2008, the core national CPI posted year-over-year gains ranging from +0.1% to +2.4%, followed by two months of unchanged readings.

In July and August 2008, the core index hit +2.4%, the fastest pace of inflation since October 1997, but started to slide from there. Excluding the effects of the April 1997 sales tax hike, the July-August rate was the highest in about 16 years, since +2.5% in June 1992.

In October this year, core national CPI fell 0.1% month-on-month, after rising 0.1% in September, which was the first m/m gain in six months.

Meanwhile, core central Tokyo CPI fell only 1.9% year-on-year in November, below the record drop of 2.2% in October. It was still the seventh straight y/y drop in the capital.

Lower costs of overseas holiday tours continued to lead the decline but lower gasoline prices were not listed as a major contributor to the overall price drop.

Month-on-month, core central Tokyo CPI fell 0.1% in November after falling at the same rate in October and being unchanged for the previous two months.

In September 2008, the central Tokyo core CPI hit +1.7%, matching the 1.7% gain seen in March 1998. Excluding the effects of the 1997 sales tax hike, it was the highest in nearly 16 years, since the 1.9% rise in December 1992.

CPI figures date to 1970 under the current 2005 base year.

Other details from the latest data:

Total national CPI (y/y): Oct a record -2.5% vs. Sept -2.2%, posting the 9th straight month of y/y drops after being unchanged in January 2009.

Between October 2007 and December 2008, the index showed 15 straight months of on-year gains, ranging from +0.3% to +2.3%.

In October, the decline was led by continued double-digit drops in the prices of gasoline (-19.4. vs. Sept -25.1%), heating oil (-37.1% vs. Sept -41.8%) and overseas package tours (-22.8% vs. Sept -19.4%).

Among durable goods, the prices of refrigerators fell 12.1% vs. -11.3% in the previous month. Fresh vegetable prices also dipped.

Total national CPI (m/m): Oct -0.4% vs. Sept unchanged, posting the first m/m drop in three months. A continued drop in overseas package tours and a plunge in some fresh vegetable prices led the decline.

Total central Tokyo CPI (y/y): Nov -2.2% vs. Oct a record -2.4%, showing the 8th straight month of y/y drops after being in positive territory for 18 months in a row through March 2009 (ranging from +0.1% to +1.6%).

The decline was led by continued sharp on-year drops in overseas package tours (-19.9% vs. Oct -22.8%) as well as lower costs of fresh vegetables, rents, children's clothing and washer/dryers.

The prices of retail gasoline in central Tokyo fell only 4.2% y/y in November, recovering sharply from -19.1% in October.

Total central Tokyo CPI (m/m): Nov -0.2% vs. Oct -0.4%, posting the third straight m/m drop. The decline in November was led by a plunge in fresh vegetable prices again. Overseas package tours also dropped.

National CPI excluding food and energy, or the U.S. style core CPI (y/y): Oct -1.1% vs. Sept -1.0%, the 10th straight on-year drop.

Tokyo CPI excluding food and energy (y/y): Nov -1.3% vs. Oct -1.4%, in negative territory for the 11th straight month.

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