TOKYO — Japan’s core consumer prices rose for a fifth straight month in January but at a slower pace than in the previous month, boosting the likelihood the country’s central bank will lag behind other economies in raising interest rates.
The core consumer price index (CPI), which excludes volatile fresh food prices but includes fuel costs, increased 0.2% in January from a year earlier, government data showed on Friday.
That was weaker than the median forecast for a 0.3% gain in a Reuters poll and a 0.5% rise in the previous two months.
The data will be among factors the Bank of Japan will scrutinize at its next policy meeting, which is scheduled for the middle of next month.
Core consumer inflation has posted a year-on-year every increase month since September. January’s increase marked the slowest year-on-year rise in three months.
The tepid rate of increase shows price rises in the world’s third-largest economy have remained extremely modest compared with much sharper gains in other advanced economies as sluggish wage growth discourages firms from hiking prices much.
The small gain reinforced expectations the Bank of Japan (BOJ) will maintain its ultra-loose monetary policy for the time being to achieve its 2% inflation target.
The BOJ has stuck to massive monetary stimulus as it seeks to have inflation reach its target, despite worries about the side-effect of a weakening yen.
Some analysts believe that has helped lift the price Japanese firms are paying for overseas commodities, pushing up the country’s trade deficit to an eight-year high in January.
(Reporting by Daniel Leussink; editing by Richard Pullin)