February inflation data came in weaker than expected as disinflation continued despite several months since reopening. The CPI eased to 1.0% y/y from 2.1% the previous month while core was down to +0.6% y/y from 1%. Most countries in non-Japan Asia saw a moderation in February inflation but not to the same extent as China.

• Pipeline inflation moved further into disinflationary territory with the February PPI down 1.4% y/y after -0.8% the previous month. This was the lowest result since November 2020.
• Food/tobacco drove the decline in headline CPI inflation with transport & communication and recreation & education also down significantly. The moderation was seen in both urban and rural areas.