Japan's core consumer prices inched up 0.2 percent in January from a year earlier, as inflationary pressures from surging energy prices and a weak yen persisted, government data showed Friday.
With energy costs rising at the fastest pace in over four decades, the nationwide core consumer price index excluding volatile fresh food items gained for the fifth straight month, the Ministry of Internal Affairs and Communications said.
The pace of price growth slowed from 0.5 percent in December, largely because of the diminishing year-on-year impact of higher accommodation fees that came in response to the suspension of the government's discount program to revive local tourism amid a resurgence of coronavirus infections.
The headline figure is far from the Bank of Japan's 2 percent inflation target, bolstering the likelihood that it will remain a laggard among central banks in major economies in shifting toward policy normalization.
Higher energy and raw material costs have already begun to pressure households and Prime Minister Fumio Kishida said Thursday the government will consider additional steps to mitigate the impact.
The yen's depreciation, a reflection of diverging policy paths for the BOJ and its peers, increases import costs for resource-poor Japan.
"Crude oil prices have been rising recently and this will likely continue to have a strong bearing on the CPI beyond the end of the fiscal year (in March)," said Yuichi Kodama, chief economist at the Meiji Yasuda Research Institute.
"Rising energy and food prices are negative" for consumer sentiment, he said.
Energy prices jumped 17.9 percent, the sharpest gain since January 1981, the ministry said. Kerosene prices soared 33.4 percent and gasoline surged 22.0 percent.
Among major gainers, beef bowl prices jumped 9.0 percent, as restaurant operators passed on higher beef prices and shipping costs to consumers.
The ministry data showed the rise in accommodation fees moderated in January to 0.6 percent, compared with a 44.0 percent year-on-year gain in December.
Japan will likely face inflationary pressures in the coming months as the escalating standoff between Ukraine and Russia has sent crude oil prices higher, while the year-on-year impact of lower mobile phone fees, which plunged 53.6 percent in January, is set to dissipate.
"It's possible that the core CPI will temporarily hit 2 percent. That won't mean the BOJ's price stability target has been attained as Mr. Kuroda hopes to see, and thus monetary easing policy will not change," Kodama added.
The so-called core-core CPI, which excludes both fresh food and energy items, fell 1.1 percent, the sharpest decline since March 2011. It was down for the 10th straight month.