TOKYO (Reuters) – Consumer inflation in Tokyo likely slowed down in February as the government reinstated steps to ease the burden from energy bills as higher living costs haunt persistent inflation presser, a Reuters poll showed on Friday.
The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was seen rising 2.3% year-on-year this month, slowing down from a 2.5% gain in January, the median forecast of 16 economists found.
“While food prices continue to rise, the pace of increase in core CPI is expected to slow due to lower electricity and gas prices led by the resumption of government support,” said Shunpei Fujita, economist at Mitsubishi UFJ Research and Consulting.
Data on Friday showed Japan’s nationwide core consumer price index rose 3.2% in January from the previous year to hit a 19-month high, reinforcing expectations the central bank will continue to raise interest rates from still-low levels.
For nearly three years, inflation has exceeded the central bank’s target of 2%, underlining rising inflationary pressure.
In January, the BOJ raised its short-term interest rate to 0.5% from 0.25%, the highest in 17 years, reflecting its conviction that rising wages will keep inflation stable at its 2% target.
Governor Kazuo Ueda has signalled his readiness to keep raising rates if price outlook continues to improve.
The internal affairs ministry will release Tokyo CPI data at 8:30 a.m. on February 28 (2330 GMT February 27).
Japan’s industrial output will likely show a 1.2% fall in January from the previous month, down for a third month, reflecting sluggish activity in the global manufacturing sector, according to the poll.
Retail sales are expected to have increased 4% in January from a year ago, the strongest pace of gain since February last year, helped by solid auto sales, the poll showed.
The trade ministry will publish factory output and retail sales at 8:50 a.m. on February 28 (2350 GMT February 27).
(Reporting by Kaori Kaneko; Editing by Christian Schmollinger)
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