TOKYO – Japan’s core inflation accelerated in March due to persistent rises in food costs, data showed on Friday, complicating the central bank’s task of weighing mounting price pressures against risks to the economy from higher US tariffs.
The data comes ahead of the Bank of Japan’s policy meeting on April 30-May 1, when the bank is set to keep interest rates steady at 0.5 percent and cut its growth estimates as US President Donald Trump’s steep tariffs cloud the economic outlook.
The core consumer price index (CPI), which includes oil products but excludes fresh food prices, rose 3.2 percent in March from a year earlier, government data showed, matching a median market forecast and accelerating from a 3 percent gain in February.
Core inflation has now exceeded the BOJ’s 2 percent target every month for three years in a row, in a sign of mounting price pressure as companies continue to pass on rising raw material and labour costs.
Inflation measured by an index that strips away the effects of both fresh food and fuel costs – closely watched by the BOJ as a broader price trend indicator – also accelerated to 2.9 percent in March from 2.6 percent in February.
Households faced price hikes for a wide range of goods including gasoline, hotel bills and chocolates. Rice prices spiked 92.5 percent in March from year-ago levels.
Services prices rose 1.4 percent year-on-year in March, much smaller than a 5.6 percent jump in goods prices in a sign the recent rise in inflation was driven mostly by high raw material costs.
