JAPAN’S consumer prices rose 3.1% last month from a year earlier, government data showed today, slowing from the four-decade highs seen in previous months.

The figure, which excludes volatile fresh food, met market expectations and comes after the government introduced relief measures for soaring energy bills.

It is the first deceleration in over a year and marks a drop from January, when consumer prices jumped 4.2% on-year – the highest level since September 1981, fuelled in part by higher energy bills.

UBS economist Masamichi Adachi had said ahead of the data release he expected a lower inflation rate in February “due to a discount on energy price with the government’s subsidies”.

The 3.1% rise is above the Bank of Japan’s two-percent target but remains lower than the sky-high inflation seen in the United States and elsewhere.

When both fresh food and energy prices are excluded, the figure for February is 3.5%.

The central bank sees the price increases as the result of temporary factors and left its ultra-easy monetary policy unchanged in a policy meeting this month.

It was the final meeting for outgoing governor Haruhiko Kuroda, who is stepping down after a decade in which he enacted a raft of extraordinary ultra-loose policies.

Despite pressure to hike interest rates to tackle inflation as other central banks worldwide have done, the BOJ has said it first wants to see evidence of more sustained rises, including salary increases. – AFP, March 24, 2023.