The owner of Rice Shop Tadao Koike wears a rice bag in his store in Tokyo on February 14, 2025.
Yuichi Yamazaki | AFP | Getty images
The central inflation of Japan exceeded expectations and reached 3% in February, according to government data on Friday, reinforcing the case for higher increases in interest rates.
The central inflation figure, which excludes fresh food prices, was higher than the expectations of 2.9%, according to economists surveyed by Reuters, but less than January 3.2%.
The main inflation increased 3.7% year after year in February, decreasing from a maximum of two years of 4% seen last month. It means that the main inflation rate has remained above the 2% target of the Bank of Japan for 35 consecutive months.
The so -called “nucleus” inflation rate, which eliminates fresh food and energy prices and is closely monitored by the BOJ, rose to 2.6% from 2.5% in the previous month.
The data occurs shortly after the Central Bank kept stable interest rates at 0.5% on Wednesday.
In his statement, the BAN said that “the inflation of the underlying CPC is expected to increase gradually” and be “generally consistent” with its 2%objective.
The BOJ said that it is likely that central inflation will increase during its fiscal year 2025, due to high rice prices and the flexibility of government measures to reduce inflation.
The exchange rate developments are also more likely to affect prices, added the BC, saying that “it remains high uncertainties surrounding economic activity and prices of Japan, including the situation in evolution with respect to trade and other policies in each jurisdiction.”
The Japanese Yen strengthened 0.1% after the release of data to operate in 148.61 against the dollar, while the reference point Nikkei 225 marginally slipped.
When the BAN raised the rates to 0.5% in January, the Central Bank said in its summary of the opinions that the economic activity and prices of Japan have developed “generally in line with the perspective of the bank”, and added: “If the economic activity and prices remain on the road, it will be necessary for the bank to continue increasing the interest rate of the policy accordingly.”
Salary walks
Inflation numbers were also produced in the middle of strong salary walks achieved of the unions in Shado Waste Vat negotiations, which increases the case that the BOM continues to continue normalizing its monetary policy.
The largest union in Japan announced on March 14 that it managed to ensure an average increase of 5.46% in salaries as of April, its greatest increase in more than three decades.
The Japanese union confederation, or Rengo, which has around 7 million members, said that the first tabulation of the results that cover 760 unions was 0.18 percentage points higher than last year’s increase of 5.28%.
Small to medium -sized companies saw an average increase of 5.09%, an increase of 0.67 percentage points compared to last year and the first time since 1992 that salary increases for such companies crossed the 5%mark.
According to the reports, UA Zensen, an umbrella group that represents retail unions, restaurants and other industry unions, said that 139 of their member unions received an average increase of 5.37% in monthly salaries for full -time workers, a little less than the record figure of 2024 of 5.91%.
