MNI BRIEF: Japan March Trimmed Mean Rises 2.2% Vs. 2.3% - BOJ

Japan’s trimmed mean measure of underlying inflation rose 2.2% in March, slowing from 2.3% in February, showing the pace of cost pass-through continues to slow, data released by the Bank of Japan showed on Tuesday.

The trimmed mean followed data released Friday which showed Japan's annual core consumer inflation rate rose 2.6% y/y in March, down from February’s 2.8%, the 24th straight month above the BOJ's 2% target.

Tuesday’s data showed the mode, the inflation rate with the highest density in the distribution, stood at 1.9% in March, down from 2.0% in February and the first time below the target in 14 months.

BOJ officials are focused on whether the underlying inflation trend based on services prices strengthens in or after April, when businesses revise their prices amid high labour costs. (See MNI POLICY: Oct Price Revisions Key To Further Rate Hikes) They are also watching how the recent rise in import prices, which rose 1.4% y/y in March, affects corporate price-setting (See MNI POLICY: BOJ Sees Risk of Earlier Inflation Rebound).

The BOJ board will likely revise up its median forecast for core inflation this fiscal year to above 2.5% from January's 2.4% following this week's policy meeting.