Japan Posts Increase in Core Consumer Prices

(MENAFN) Japan's core consumer prices rose 1.6 percent year-on-year in February — slipping below the critical 2 percent threshold for the first time since March 2022 — as plunging energy costs offset persistent food price pressures, government data released Tuesday showed.

The core consumer price index (CPI), which strips out volatile fresh food costs, decelerated from a 2 percent gain recorded in January, according to the Ministry of Internal Affairs and Communications.

Energy prices led the pullback, tumbling 9.1 percent after a 5.2 percent drop the previous month. Gasoline prices spearheaded the decline with a steep 14.9 percent plunge, while electricity bills fell 8 percent — offering households a rare reprieve amid broader cost-of-living strains.

Food prices, excluding fresh items, climbed 5.7 percent in February, easing slightly from a 6.2 percent surge in January, yet remaining a stubborn source of inflationary pressure for consumers.

However, economists warn the relief may prove short-lived. With crude oil prices surging in the wake of U.S.-Israeli military strikes on Iran at the close of February, the downward trajectory in inflation is widely expected to reverse sharply in the months ahead — potentially erasing the progress made and reigniting pressure on Japanese policymakers to respond.

The data marks a pivotal moment for Japan's inflation outlook, caught between fleeting energy-driven relief and the looming threat of renewed price acceleration driven by escalating Middle East tensions.

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