Japan's core inflation slows to 2-year low

Tokyo [Japan], February 21: Japan's annual core consumer inflation hit a two-year low to match the central bank's 2 percent target in January, data showed on Friday, suggesting weakening price pressure that could complicate its decision on how soon to raise interest rates.
A separate index seen as a better indicator of underlying inflation also slowed but remained well above the Bank of Japan's target, suggesting that solid wage gains will keep the central bank on course to push up still-low borrowing costs.
The year-on-year increase in the core consumer price index (CPI), which excludes volatile fresh food costs, matched a median market forecast and slowed from a 2.4 percent gain in December.
An index stripping away both fresh food and fuel prices, which is closely watched by the BOJ as a better indicator of demand-driven inflation, stayed well above its target to rise 2.6 percent year-on-year in January.
But it was lower than a 2.9 percent gain in December and matched a low hit in February 2025, as food price increases ran their course.
Source: Emirates News Agency