Inflation in Tokyo slowed further in March, following a sharp deceleration in the previous month that was mainly driven by government subsidies for electricity costs.
(Bloomberg) — Inflation in Tokyo slowed further in March, following a sharp deceleration in the previous month that was mainly driven by government subsidies for electricity costs.
Consumer prices excluding fresh food rose 3.2% in the capital from a year ago, slowing from February’s figure of 3.3%, according to the ministry of internal affairs Friday. Economists had forecast a 3.1% increase.
The steady easing of price gains may add some credence to the central bank’s current view that inflation will slow further, as it works through its first leadership transition in a decade.
The further deceleration in the inflation gauge suggests that Prime Minister Fumio Kishida’s stimulus measures continued to curb price hikes. The package announced last year, which included a 20% discount on household electricity rates, began to feed into data from February.
Economists point out that a higher year-earlier base also helped moderate the increase this month. Last March, core inflation in Tokyo climbed 0.8%, the fastest clip in more than two years at the time.
The central bank will update its economic outlook at its April policy meeting after assessing its price forecast for the coming years. The BOJ now sees inflation slowing below 2% again during the next fiscal year starting April.
What Bloomberg Economics Says…
“Base effects should continue to trim CPI gains further out. We see core inflation dropping below 3% in 2Q23 after two quarters of readings over 3%.”
— Yuki Masujima, economist
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Separate data showed the labor market condition worsened slightly in February, with the unemployment rate increasing to 2.6% and the jobs to applicant ratio edging down to 1.34, meaning there were 134 jobs offered for every 100 applicants.
(Updates with additional data from separate report)
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