Japan February Inflation Rate Weaker than Expected

Japan's consumer price inflation stood at 0.2 percent year-on-year in February 2019, unchanged from the previous month's 15-month low and below market expectations of 0.3 percent. Prices of both food and transportation & communication fell for a third month in a row, while housing costs were flat.

Prices of food dropped by 1.4 percent year-on-year in February, after a 1.5 percent fall in January and marking the third straight month of declines. Among food, cost continued to fall for vegetables & seaweeds (-15 percent vs -14.4 percent), of which fresh vegetables (-22.2 percent vs -21.2 percent); fruits (-1 percent vs -2.7 percent), of which fresh fruits (-1.4 percent vs -3.3 percent); and oils, fats & seasonings (-0.4 percent vs -0.6 percent). In addition, inflation slowed for dairy products & eggs (2.4 percent vs 2.8 percent), meals outside the home (1 percent vs 1.1 percent); while was steady for cereals (at 0.7 percent). Meantime, cost rose faster for fish & seafood (1.6 percent vs 1.5 percent), of which fresh fish & seafood (0.6 percent vs 0.5 percent), cooked food (0.4 percent vs 0.1 percent), and meat (0.4 percent vs 0.3 percent).

In addition, cost of transportation & communication declined for the third consecutive month (-0.6 percent vs -0.2 percent), while prices were unchanged for housing (vs -0.1 percent in January) and clothes & footwear (vs 0.2 percent in January). Meanwhile, inflation was steady for miscellaneous goods & services (at 0.9 percent), while slowed for: culture & recreation (1.4 percent vs 1.5 percent); medical care (1.2 percent vs 1.3 percent); and education (0.4 percent vs 0.5 percent). Cost went up slightly faster for fuel, light & water charges (5.3 percent vs 5.2 percent), of which electricity (7.7 percent vs 7.2 percent) and gas (6.2 percent vs 5.6 percent).  

Annual core consumer inflation, which excludes fresh food, inched lower to 0.7 percent in February from 0.8 percent in January and also below market consensus of 0.8 percent. The figure came in well below the Bank of Japan's target of 2 percent.

On a seasonally adjusted monthly basis, consumer prices were unchanged in February, after a 0.3 percent rise in January.

Japan February Inflation Rate Weaker than Expected

Statistics Japan | Rida Husna | rida@tradingeconomics.com
3/22/2019 11:05:31 AM