MNI BRIEF: Japan Jan Core CPI Rises 2.0% Vs. Dec +2.3%

The y/y rise of Japan's annual core consumer inflation rate decelerated to 2.0% in January from December’s 2.3%, above the 1.9% market consensus, illustrating the pass-through of cost increases continued to weaken, data released by the Ministry of Internal Affairs and Communications showed on Tuesday.

January’s CPI remained above the Bank of Japan’s 2% target for the 22nd consecutive month but was the lowest level since March 2022 when it rose 0.8%. The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 3.5%, also slowing from December's 3.7% and for the fifth straight deceleration.

Services prices rose 2.2% y/y in January, slowing from December’s 2.3%. BOJ policymakers are closely monitoring services prices to gauge the strength of the wage-price virtuous cycle, a key input into future plans to alter easy policy settings. (See MNI POLICY: BOJ April Action Will Hinge On CPI Result)