BOJ's new index shows Jan consumer prices up 1.1% year-on-year

[TOKYO] Japanese consumer prices rose 1.1 per cent in the year to January when stripping away the effect of energy and fresh food costs, a new indicator released by the Bank of Japan showed on Friday.

That was less than a 1.3 per cent annual increase in December.

The BOJ currently uses the government's core CPI, which excludes fresh food but includes energy costs, as its key price measurement in guiding monetary policy. That index was flat in the year to January, data released earlier on Friday showed.

With core CPI now stagnant due largely to slumping oil prices, the central bank has begun internally calculating a new index that shows inflation exceeding 1 per cent in the past few months. That index strips away volatile fresh food and energy costs but includes processed and imported food prices, which are rising.

The BOJ has said it would release the index each month on the day the government publishes its price data.

REUTERS