Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Japan CPI rises as expected in Feb, stays well above BOJ target

Published 2024-03-21, 07:42 p/m
© Reuters.
USD/JPY
-
JP225
-

Investing.com-- Japan consumer price index (CPI) inflation rose as expected in February, rising well above the Bank of Japan’s annual target rate and giving more credence to the central bank’s recent policy shift. 

Core CPI inflation, which excludes volatile fresh food prices, grew an annualized 2.8% in Feb, official data showed on Friday. The reading was in line with expectations and picked up sharply from the 2% seen in the prior month- where it had fallen to the BOJ's 2% annual target for the first time since early-2022.

A core CPI reading that excludes both fresh food and energy prices, and is seen as a key indicator of underlying inflation by the BOJ, rose 3.2% in Feb, easing from the 3.5% seen in the prior month and coming further away from 40-year highs hit in 2023. 

Headline CPI inflation rose 2.8% from the 2.2% seen in the prior month. 

Food price inflation remained a key driver of prices, while spending on recreational goods and services also picked up slightly from the prior month. 

CPI comes just after BOJ policy shift 

Friday’s reading comes just days after the Bank of Japan hiked interest rates for the first time in 17 years, and also ended its yield curve control programs. The move marked a historic shift away from nearly a decade of ultra-dovish monetary policy.

The BOJ forecast an uptick in inflation over the coming months, driven chiefly by increased private consumption following a bumper hike in wages this year. 

Negotiations between major labor unions and employers showed that Japanese workers won strong wage hikes for 2024- a trend that is likely to push up inflation in the coming months.

The Japanese economy is also expected to see a renewed boost from higher consumption this year, after barely dodging a technical recession in the fourth quarter of 2023.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.