Japan’s key inflation rate remained at 0.9 percent in January on higher energy costs, almost matching market forecasts and still below the Bank of Japan’s 2 percent target, government data showed Friday.
The year-on-year change in the core consumer price index, which excludes volatile fresh food prices, remained positive for the 13th consecutive month, according to the Ministry of Internal Affairs and Communications. The rate had also stood at 0.9 percent in each of the previous two months.
As energy costs have peaked with crude oil prices slowing the pace of increase, the inflation rate is “expected to be flat in the coming months, although the Japanese economy is recovering moderately,” a ministry official said.
Electricity fees and gasoline prices were the main driver behind the increase in the core CPI, rising 6.4 percent and 8.8 percent, respectively.
Among nonfresh foods and beverages, prices for beer increased following tighter regulations on discount beer while those for rice and beef also rose, the ministry said.
Lower costs for mobile phone contracts weighed on the index, in a sign that carriers are wary of charging more for products and services in fear of losing customers.
Yoshimasa Maruyama, chief economist at SMBC Nikko Securities Inc., said the BOJ’s 2 percent goal is “nowhere in sight,” underscoring that “the effect of oil prices in raising the core CPI will likely gradually dissipate in 2018.”
Excluding both fresh food and energy prices, so-called “core-core” consumer prices rose 0.4 percent last month from a year before.