Japan's Core Inflation Rate Remains Below Central Bank Target

Data released on Friday, April 24, shows that Japan's core consumer inflation rate slowed for the second consecutive month in March, falling below the central bank's 2% target, as government fuel subsidies offset price pressures from energy shocks caused by the war in Iran. Analysts expect inflation to accelerate in the coming months as companies begin to pass on rising fuel costs stemming from the Middle East conflict. The core consumer price index (CPI), which excludes volatile fresh food prices, rose 1.8% year-on-year in March, in line with market median forecasts, up from 1.6% in February. Another index that excludes fresh food and fuel, which the Bank of Japan closely monitors as a better gauge of demand-driven price changes, rose 2.4% year-on-year in March, down from 2.5% in February.