Japan’s Ministry of Internal Affairs and Communications said on Friday that core consumer prices in Japan, excluding fresh food, increased 1.8% from a year earlier in March. Compared to a 1.6% increase in the previous month, it is above the median economist expectation of 1.7%. The index was bolstered by a slowdown in the drop in petrol prices.
The BOJ regularly monitors the metric, which excludes energy and fresh food, as a measure of underlying inflation. It rose 2.4%, staying above the central bank’s 2% objective. When all items were taken into account, overall inflation increased to 1.5%.
Also Read: US unlikely to ease Hormuz blockade without major Iranian concessions: Experts
The news comes at a time when rising oil prices and ongoing yen depreciation are driving up import costs. However, given the uncertainty surrounding the Middle East conflict, the BOJ is leaning toward maintaining its base rate on Tuesday.
The increase in energy costs might not have been accurately reflected in the figures. Before the government reinstated subsidies to keep the price around ¥170, gasoline prices reached a record ¥190.8 per litre in the middle of last month. This was an expensive budgetary move for Takaichi’s administration. Following a 14.9% decline in the previous month, petrol prices dropped 5.4% from a year earlier in Friday’s report.
Yoshiki Shinke, senior executive economist at Daiichi Life Research Institute, told Bloomberg that the main drivers were petrol and kerosene.
(Edited by : Juviraj Anchil)
