Japan: Core inflation in March continues to rise
April 27, 2012
In March, the core consumer price index, which excludes volatile fresh food prices, grew 0.1% in seasonally adjusted terms over the previous month, which was an inch below February's 0.2%. Annual core inflation rose to 0.3%, overshooting the 0.1% reading expected by the market, which would have been unchanged from February. In fact, the March print represented the highest rate since November 2008. Meanwhile, annual overall inflation stepped up to 0.5% in March, which was above the 0.3% recorded in February. Moreover, the core consumer price index in Tokyo, which is available one month before the national figures and thus is a leading indicator for countrywide inflation, fell 0.5% in April over the same month last year, which was below the minus 0.3% observed in March. According to the April forecast, the median of the Central Bank's Policy Board expects core inflation to rise to 0.3% the 2012 fiscal year ending in March 2013. In FY 2013/14, the Bank of Japan sees headline inflation at 0.7%.