Japan March Inflation Rate Rises to 4-Month High of 0.5%

Japan's consumer price inflation rose to 0.5 percent year-on-year in March 2019 from 0.2 percent in the previous month and in line with market consensus. It was the highest inflation rate since November last year, as cost of both food and transport declined at a softer pace.

Prices of food dropped by 0.3 percent year-on-year in March, after a 1.4 percent fall in February and marking the fourth consecutive decline. Among food, cost decreased less for fresh food (-5.9 percent vs -10.9 percent in February); vegetables & seaweeds (-9 percent vs -15 percent), of which fresh vegetables (-14.3 percent vs -22.2 percent); and oils, fats & seasonings (-0.2 percent vs -0.3 percent). Additionally, prices rose further for both meals outside the home (1.1 percent vs 1 percent); and meat (0.9 percent vs 0.4 percent), and rebounded for fruits (2.8 percent vs -1 percent), namely fresh fruits (2.7 percent vs -1.4 percent). Meantime, inflation slowed for cereals (0.6 percent vs 0.7 percent); dairy products & eggs (2.3 percent vs 2.4 percent); fish & seafood (1.1 percent vs 1.5 percent), mostly fresh fish & seafood (-0.3 percent vs 0.6 percent); and cooked food (0.3 percent vs 0.5 percent).

Also, cost of transportation & communication fell less (-0.3 percent vs -0.6 percent) and prices advanced further for furniture and household utensils (1.5 percent vs 0.8 percent); miscellaneous goods & services (1 percent vs 0.9 percent); and medical care (1.3 percent vs 1.1 percent). In addition, cost of clothes & footwear rebounded (0.1 percent vs -0.1 percent). On the other hand, prices eased fuel, light & water charges (5.1 percent vs 5.3 percent), namely electricity (7.2 percent vs 7.7 percent); and culture & recreation (0.9 percent vs 1.4 percent); and inflation was steady for education (0.5 percent). Also, cost of housing was flat for the second straight month.

Annual core consumer inflation, which excludes fresh food, inched higher to 0.8 percent in March from 0.7 percent in February and slightly above market consensus of 0.7 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 March, the same as in February.

Japan March Inflation Rate Rises to 4-Month High of 0.5%

Statistics Japan l Rida Husna | rida@tradingeconomics.com
4/19/2019 9:46:51 AM