Japan's core consumer price index fell 0.4% in February from a year earlier, weighed down by cheap electricity bills, but at a slower pace following a recent rise in energy prices, government data showed Friday.
Nationwide core consumer prices, excluding volatile fresh food items, dropped for the seventh straight month after declining 0.6% in January, according to the Internal Affairs and Communications Ministry.
The latest data showed the country's CPI remained under downward pressure, far below the Bank of Japan's 2% inflation target.
In February, electricity and gas bills sagged 7.8% and 6.2%, respectively, reflecting lower crude oil prices around last summer.
Gasoline prices lost 6.2%, but the pace of decline slowed from a 9.5% fall in January due to a recent pickup in crude oil prices amid expectations that the global economy will recover from the impact of the novel coronavirus pandemic, a ministry official said.
"A recent climb in crude oil prices contributed to making overall prices slow their pace of fall," said a ministry official, adding that energy prices may have hit bottom in January and would further rise and boost overall prices in the coming months.
"The rise in energy prices could be one of the factors to lift consumer prices later this year after pushing up utility bills," said Takeshi Minami, chief economist at the Norinchukin Research Institute.
"But price hikes (by business operators) are unlikely to spread immediately as household incomes are not growing. Downward pressure on prices remains strong," he added.
Accommodation fees declined 5.1% due to weak travel demand across the country, as the country's second state of emergency over the pandemic remained in place in some prefectures including the Tokyo metropolitan area.
Major wireless carriers in Japan plan to lower mobile phone fees by the end of March in line with the government's request, with many analysts expecting such measures to further put downward pressure on prices.
The official said the ministry will closely examine price-setting by mobile phone service operators, but fell short of elaborating on the impact of the expected lower wireless communications fees.
So-called core-core consumer prices, which exclude fresh food and energy items, rose 0.2% in February from a year earlier, climbing for the second straight month.
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