Japan inflation slows sharply, masking underlying price strength

Mar 24, 2023 | News On Japan

TOKYO - Japan’s inflation slowed for the first time in more than a year, as government energy subsidies masked the stronger underlying trend ahead of the Bank of Japan’s first leadership change in a decade.

Consumer prices excluding fresh food rose 3.1% in February from a year ago, decelerating by more than a percentage point from the previous month on cheaper energy costs, the internal affairs ministry reported Friday.

While the key gauge for the central bank slowed in apparent good news for incoming Governor Kazuo Ueda, a separate index that strips out fresh food and energy accelerated to the fastest pace in over four decades, pointing to quickening fundamental price strength. That could stoke market speculation that Ueda may have to move toward policy normalization sooner rather than later.

Overall inflation would have been as high as 4.4% without the impact of government subsidies for energy and travel, ministry data indicated. A key part of Prime Minister Fumio Kishida’s economic stimulus package announced last year was a 20% discount on household electricity rates, which began to feed into data in February. ...continue reading

Source: ANNnewsCH

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