Thursday, April 18, 2019 - 20:30

MNI POLICY: Japan Mar CPI Quickens as BOJ Keeps Caution Intact

--Japan Core CPI Up 0.8% y/y In March Vs. +0.7% in February

TOKYO (MNI) - Japan's nationwide core consumer price index rose 0.8% on year in March, accelerating from +0.7% in February. However, Bank of Japan officials maintain cautious on the outlook as they don't expect the rising trend to accelerate sharply.

The March core CPI continued to be boosted by positive contribution from energy prices (0.39 percentage point in March vs. 0.34 percentage point in February and 0.37 percentage point in January).

The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 0.4% on year in March, unchanged from February. It was the 21st consecutive month of year-on-year increase.

The March data included some positive aspects.


Prices of goods excluding volatile fresh food rose 1.3% on year in March, accelerating from February's 1.1%. Overall goods prices rose 0.7% on year in March, accelerating from -0.1% in February.

Prices for processed food (canned food, bread, snacks, beverages, etc.), which account for 15% of the total CPI that BOJ officials focus on, rose 0.6% on year, up from a 0.5% gain in the previous month.

Costs of eating-out rose 1.1% on year in March after 1.0% gain in February, indicating that upward pressure on the service prices from higher labor and material costs continues.

However, BOJ officials remain cautious with all factors considered.


Some companies, such as restaurants and processed food companies, are raising their prices on the back of the high labor and material costs.

BOJ officials are focused on Tokyo core CPI, due to be released on April 26, to gauge how the recent corporate price hikes have affected consumer price data.

The March data continued to indicate that inflation remains stubbornly slow amid a sustainable economic expansion and tight labor market conditions.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
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