MNI BRIEF: Japan's Feb Core CPI Rises 3.0% Vs. Jan's 3.2%

Japan's annual core consumer inflation rate decelerated to 3.0% y/y in February from January’s 3.2% due to lower energy prices, although prices for foods excluding perishables rose, data released by the Ministry of Internal Affairs and Communications showed on Friday.

February’s index stayed above the Bank of Japan’s 2% target for the 35th consecutive month. Energy prices rose 6.9%, down from 10.8% the prior month, while food excluding perishables increase 5.6%, up 50 basis points.

The rise was due largely to the phase-out of government subsidies aimed at curbing utility bills, and the pass-through of high labour and material costs to prices.

The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 2.6% y/y in February, accelerating from 2.5% in January.

Services prices rose 1.3% y/y in February vs. 1.4% in January.

The BOJ held the policy rate at 0.5% this week. (See MNI BOJ WATCH: Ueda Sees Gradual Hikes, May 1 Possibility)