February 2023 Consumer Price Index
Core CPI growth rate decreases due to effects of government policy, but the upward trend in prices is continuing.
March 24, 2023
Summary
◆Japan’s February 2023 core CPI (excluding fresh foods) was at +3.1% y/y. Growth rate was down by 1.1%pt in comparison to the previous month. This was due mostly to the government's Fuel Oil Price Fluctuation Mitigation Program, which pushed down electricity and gas bills significantly. New core-core CPI (excluding fresh food and energy) was at +3.5%, up 0.3%pt from the previous month. The chain index (seasonally adjusted) shows that the upward trend in prices is continuing.
◆Japan’s new core-core CPI growth rate (excluding fresh foods and energy) is expected to continue its downward trend until the first half of 2024, and then accelerate moderately to about +1% y/y in the Jan-Mar period of 2025. The underlying tone of prices is expected to return to a gradual increase as the trend of price hikes, especially for foodstuffs, gradually subsides and the macro supply-demand balance tightens. If a large base-pay increase is realized in the spring wage negotiations, the probability that the upward trend in prices will be further strengthened will increase.
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