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Consumer Prices Rise in Japan, Delaying Interest Rate Move

Consumer inflation is expected to pick up due to surging energy prices, while last year’s mobile phone fee cuts are also set to fall out of calculations

Japan ended strict Covid-related border control measures on Saturday.


Japan’s core consumer prices rose for a fifth straight month in January but at a slower pace than in the previous month, boosting the likelihood the country’s central bank will lag behind other economies in raising interest rates.

Consumer inflation is expected to pick up in the coming months due to surging energy prices, while last year’s mobile phone fee cuts are also set to fall out of calculations and will no longer be a drag on prices.

The core consumer price index (CPI), which excludes volatile fresh food prices but includes fuel costs, increased 0.2% in January from a year earlier, government data showed on Friday.

That was weaker than the median forecast for a 0.3% gain in a Reuters poll and a 0.5% rise in the previous two months.

“Consumer inflation will pick up from next month onward on higher food and energy prices,” Taro Saito, an executive research fellow at NLI Research Institute, said.


Data Under Scrutiny

“It may jump to more than 1.5% in one go in April once the impact of mobile phone fee cuts comes to an end.”

The price data will be among factors the Bank of Japan will scrutinise at its next policy meeting, which is scheduled for the middle of next month.

The core CPI has posted a year-on-year increase every month since September. January’s increase marked the slowest year-on-year rise in three months.

Accommodation prices rose just 0.6% from a year earlier to grow at the weakest rate since June 2021 after a domestic travel campaign in late 2020 came to an end.

Cellphone fee cuts pushed down the CPI by about 1.5 percentage points last month.


  • Reuters, with additional editing by George Russell




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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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