The pace of Japan’s consumer inflation was a little stronger than expected even as the resumption of government energy subsidies slowed price gains, backing the case for the Bank of Japan to stay on a gradual rate hike path.
Consumer prices excluding fresh food rose 3.0% from a year ago in February, decelerating from a 3.2% pace in January, the internal affairs ministry said Friday. Economists had expected a 2.9% gain. Overall inflation slowed a little less than expected, slipping to 3.7% from 4% in the prior month.
The data was largely in line with the inflation report for Tokyo, a leading indicator that suggested a slowdown resulting from the energy subsidies. Nationally, the subsidies shaved 0.33 percentage point off the overall inflation gauge in February. The key price gauge stayed at or above the BOJ’s 2% target for a 35th month.
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