ShreeMetalPrices: Japan’s core CPI slows to 3.1% in Feb vs Forecast 4.2%


Japan’s CPI Consumer Price Index inflation fell from nearly fourty-year highs in Feb, according to statistics released on Friday, because govt subsidies on usefulness prices, a stronger yen, and reduced commodity rates all contributed to decreased price pressures.

Inflation in the core Consumer price index, which excludes unstable fresh food costs, increased by an anticipated 3.1percent in the year ending in Feb. A significant down from January’s estimate of 4.2 percent.

While being at its lowest point since Sept 2022. The figure was still much above than the Bank of Japan’s 2 percent yearly target.

Inflation in the (Japan) Consumer price index which includes fresh food, increased 3.3 percent during the twelve months prior to Feb, lower from 4.3 percent in January.

CPI inflation decreased by 0.6 percent from one month to the next in Feb.

The figure is consistent with previous data that showed inflation in Tokyo, an indicator for the nation. As a whole, decreased after reaching a more than 40-year peak in Feb.

Consumer Price Index

The greatest factor in the lower inflation rate was a roughly 19 percent decrease in electricity costs from the previous month. As Japan introduced an additional 2 trillion (Therefore, 1 dollar = 130.75) in subsidy to lessen the negative effects of high inflation on the gdp.

As a result of a sharp decline in global commodity prices, Japanese utilities experienced lower import costs. Which led to a 6.5 percent drop in gas prices and a 11 percent decrease in fuel charges.

Early this year, prices for natural gas plunged to almost record lows, and this week. Oil prices hit a 15-month dip due to worries. That a world financial crisis will slow down economic growth & reduce demand for crude.

Japan’s import prices were also lowered as a result of the yen’s strengthening and the dollar’s diminished impact. After the report on Friday, the yen was stable.

The Bank of Japan’s decision to maintain its ultra-loose policy in light of a leadership change is strengthened by Friday’s inflation figure.

The Bank of Japan had been under growing pressure to tightening policy because inflation rose to a near 42-year peak in Jan.

Nonetheless, it had continued its ultra-accommodative stance at its meeting in Feb, claiming. That govt subsidies would likely cause inflationary pressures to subside soon.

However, the BOJ only anticipates price pressures approaching its 2 percent target level by mid-2025. And anticipates inflation to build up once more by late 2023 to mid-2024.