Japan: Core inflation ticks up in February
March 23, 2018
In February, the core consumer price index rose 0.1% compared to the previous month in seasonally-adjusted terms, down slightly from January’s 0.2% increase.
Both core inflation and overall inflation accelerated to their highest respective rates in nearly three years in February. Core inflation, matching market expectations, ticked up to 1.0% in February, while overall inflation accelerated to 1.5%.
Although the overall inflation rate crept closer to the Bank of Japan’s 2.0% target in February, so far this year a strengthening yen’s moderating effect on prices has helped ensure it remains underwhelming. Until overall inflation approaches that target rate, the Bank is widely expected to continue maintaining its ultra-accommodative monetary policy stance.
Japan Inflation Forecast
The Bank of Japan (BoJ) expects that core inflation will average between 1.3% to 1.6% in the fiscal year ending March 2019. In the following fiscal year, the BoJ sees core inflation rising to between 2.0% and 2.5%. FocusEconomics Consensus Forecast panelists expect inflation of 1.0% in calendar year 2018, which is up 0.1 percentage points from last month’s estimate. In 2019, our panelists see inflation at 1.3%.
Author: Edward Gardner, Economist