Global Enterprise logo
BROUGHT TO YOU BYUOB logo

Core inflation in Japan’s capital hits 2.4%, stays above BOJ’s target

    • The cost of rice in Tokyo surged 92.4 per cent in March, a sign of the pain households were feeling from rising living costs.
    • The cost of rice in Tokyo surged 92.4 per cent in March, a sign of the pain households were feeling from rising living costs. PHOTO: AFP
    Published Fri, Mar 28, 2025 · 09:20 AM

    [TOKYO] Core consumer inflation in Japan’s capital stayed above the central bank’s target and accelerated in March on steady gains in food costs, data showed on Friday, keeping alive market expectations of a near-term interest rate hike.

    The data, which is closely watched by policymakers as a leading indicator of nationwide price trends, highlights mounting inflationary pressure as companies continue to pass on rising raw material costs to households.

    The Tokyo consumer price index (CPI), which excludes volatile fresh food costs, rose 2.4 per cent in March from a year earlier, government data showed, faster than a median market forecast for a 2.2 per cent increase. It accelerated from a 2.2 per cent gain in February.

    A separate index for Tokyo that strips away both fresh food and fuel costs - closely watched by the BOJ as a measure of domestic demand-driven prices - rose 2.2 per cent in March from a year earlier after a 1.9 per cent rise in February, the data showed.

    Food prices rose 5.6 per cent in March, faster than a 5.0 per cent gain in February. The cost of rice surged 92.4 per cent in March, a sign of the pain households were feeling from rising living costs.

    The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5 per cent in January on the view Japan was on the cusp of sustainably hitting its 2 per cent inflation target.

    Governor Kazuo Ueda has said the BOJ will keep pushing up borrowing costs if continued wage gains underpin consumption and allow firms to raise prices, thereby maintaining inflation stably around its 2 per cent target.

    The Tokyo CPI data will be among factors the BOJ will scrutinise in producing fresh quarterly growth and price forecasts at its next policy meeting on April 30-May 1.

    A Reuters poll showed many analysts expect the BOJ’s next rate hike to come in the third quarter, most likely in July. REUTERS

    Share with us your feedback on BT's products and services