Japan's core consumer prices rose 0.6% in February from a year earlier, government data showed on Friday, marking the fastest pace in two years in a sign of growing inflationary pressure from higher energy and food costs.
The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes energy costs, matched a median market forecast for a 0.6% gain.
It marked the largest increase since February 2020 and followed a 0.2% rise in the previous month.
Energy bills rose 20.5% in February from a year earlier, serving as a key driver of inflation, the data showed.
Fuel And Raw Material Costs
The data highlights how the global rise in fuel and raw material costs, which has accelerated since the war in Ukraine, is building inflationary pressure in a country that for years have experienced low economic and price growth.
Japan is unlikely to see inflation hitting the central bank's target of 2%, even accounting for rising energy costs, Bank of Japan Governor Haruhiko Kuroda said on Thursday, making the case for keeping monetary policy ultra-easy.Read full story
At its two-day meeting ending on Friday, the BOJ is widely expected to keep monetary policy steady and warn of heightening economic risks from the Ukraine crisis.
Elsewhere, a Reuters poll showed that Japan's big manufacturers' business mood likely turned less optimistic in the first quarter.
"Companies saw a rise in costs due to surging commodity prices and a weak yen, while a parts shortage caused car production cuts, pushing down business conditions," said analysts at Mitsubishi UFJ Research and Consulting.