In March, the core consumer price index, which excludes volatile fresh food prices, jumped 0.5% over the previous month, posting the highest monthly increase since May 2008. The figure contrasted February's 0.1% drop. Annual core inflation stepped up from minus 0.3% in February to minus 0.1%, which overshot market expectations of minus 0.2%. The so-called core core inflation, which also excludes energy prices, jumped to 0.2% in March from minus 0.1% in the previous month. The main drivers behind the monthly increase were higher prices for clothing and footwear (+3.1% month-on-month), transportation (+1.4% mom) and fuel (+0.7% mom), which offset lower food prices (-0.3% mom). Meanwhile, annual overall inflation remained flat over February, unchanged for the fourth month in a row, driving the annual average inflation to minus 0.4% (February: -0.5% yoy). In part, the March price increase reflects supply shortages in the wake of the Tohoku earthquake. The Bank of Japan (BoJ) expects these shortages to drive up inflation further in the months ahead and lifted its core inflation forecast for 2011 and 2012 to 0.7%. In January, the BoJ saw core inflation at 0.3% in 2011 and 0.6% in 2012.
Core prices jump in March
April 28, 2011
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Japan Economic News
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