Core inflation in the Japanese capital in March 2022 rose at its fastest annual pace in more than two years, driven by rising energy costs.
Quoting Reuters on Friday (25/3), analysts said the upward trend in global commodity prices after the war in Ukraine could undermine the recovery of Japan's import-reliant economy. Even as domestic Covid-19 infections dwindle and social distancing restrictions ease.
Tokyo's core consumer price index (CPI), which excludes fresh and volatile food, but includes energy goods, rose 0.8% year-on-year in March, the fastest pace since December 2019. The figure was also higher than the average market forecast. for a 0.7% increase.
This rise in inflation follows a 0.5% increase in February.
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A measure of inflation in the Japanese capital is considered a leading indicator of the national core CPI released about a month later.
Data showed a spike in energy prices of up to 26.1%, the fastest annual growth in 41 years - boosting Tokyo's core CPI for March.
Prices for a wide variety of goods from food to entertainment services have also increased.
In an overall reading that includes fresh food prices, Tokyo's CPI in March rose 1.3% from a year earlier, hitting its highest level since April 2019.
But the one-time effect of cutting cell phone costs stripped 1.08 points off the overall index.
Even before Russia's invasion of Ukraine, policymakers at the Bank of Japan had expected core inflation to be close to its rarely-achieved 2% target, according to the minutes of its January meeting released on Thursday.
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Japanese Prime Minister Fumio Kishida will instruct his cabinet next week to draw up new relief measures, such as fuel subsidies and other measures for households, to protect the economy from the new threat of rising costs of fuel and other goods.
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