Tokyo inflation slows from 42-year high, price pressures remain

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Tokyo inflation slows from 42-year high, price pressures remain
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TOKYO :Core consumer inflation in Japan's capital Tokyo slowed in February as the effect of government energy subsidies kicked in, though an index stripping away the effect of fuel hit a fresh three-decade high in a sign of broadening inflationary pressure.Separate data showed Japan's jobless rate hit a three

TOKYO :Core consumer inflation in Japan's capital Tokyo slowed in February as the effect of government energy subsidies kicked in, though an index stripping away the effect of fuel hit a fresh three-decade high in a sign of broadening inflationary pressure.

"Inflation in the capital has fallen less than we expected last month, which suggests some upside risks to our forecast for inflation to fall below the Bank of Japan's 2 per cent target by mid-year," said Darren Tay, Japan economist at Capital Economics. The slowdown was mostly due to the effect of government energy subsidies to curb soaring utility bills, the data showed.

Energy costs rose 5.3 per cent in February from a year earlier, much slower than a 26.0 per cent spike in January. But ex-fresh food prices were up 7.8 per cent in February, faster than a 7.4 per cent rise in January. With inflation exceeding its 2 per cent target, the BOJ has seen its yield curve control come under attack from investors betting it will soon have to change policy and allow a near-term interest rate hike.

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