Japan Inflation


Core inflation remains at over-five-year high in February

In February, the core consumer price index, which excludes volatile fresh food prices, rose 0.1% over the previous month. The reading, which contrasted the 0.2% drop tallied in January, was driven by higher prices for furniture and household items as well as for culture and recreation. Annual core inflation remained at 1.3% for the third consecutive month in February. As a result, core inflation remains at the highest rate since October 2008. February's reading was in line with market expectations. Overall inflation inched up from 1.4% in January to 1.5% in February. Core inflation for Tokyo-available one month in advance of the national figures and thus a leading indicator for countrywide inflation-inched up from 0.9% in February to 1.0% in March, marking the highest level since November 2008. This result slightly overshot the 0.9% that market analysts had expected. The Bank of Japan (BoJ) expects that core inflation will be between 2.9% and 3.6% in the fiscal year ending March 2015. In the following fiscal year, the BoJ sees inflation falling to between 1.7% and 2.9%. FocusEconomics Consensus Forecast panelists expect inflation of 2.4% in the calendar year 2014, which is unchanged from last month's estimate. In 2015, the panel sees inflation at 1.6%.

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Japan Inflation Chart

Japan Inflation February 2014

Note: Year-on-year and month-on-month var. of consumer price index in %.
Source: Statistics Bureau (SB) and FocusEconomics calculations.

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