Japan's inflation rate slows to 0.6 pct in Feb. amid COVID-19 impact

Source: Xinhua | 2020-03-20

Japan's core consumer prices rose 0.6 percent in February from a year earlier, although the inflation rate remained well below the Bank of Japan's 2 percent target, owing to falling prices of crude oil and global economic concerns over the COVID-19 pandemic, the government data showed Thursday.

According to the Ministry of Internal Affairs and Communications, the nationwide core consumer price index, excluding volatile fresh food items, rose for a 38th successive month, with the latest figure coming on the heels of a 0.8 percent increase in January.

The ministry opted to maintain its view that inflation in Japan has been rising moderately.

Overall energy prices, however, retreated 0.2 percent owing to gasoline prices increasing at a slower pace due to the global pandemic, and electricity and gas price cuts expanded as crude oil prices declined, the statistics bureau said.

Prices of foreign package tours slumped 9.6 percent on year, the ministry also said, with strained ties between Japan and South Korea contributing to the decline.

Accommodation fees retreated 3.1 percent, after the number of inbound tourists slumped in late January amid efforts to contain the spread of the coronavirus, the ministry said.

Prices gained 0.2 percent from a year earlier, dropping from 0.4 percent in January, when excluding the impact of a sales tax increase foam 8 to 10 percent and a free preschool education and nursery program, both of which came into effect on Oct. 1.

The ministry also said that core-core consumer prices, which exclude both fresh food and energy items, increased 0.6 percent in the recording period on year, following a 0.8 percent gain booked in January.