MNI POLICY: Mar Tokyo CPI Rise Unchanged; BOJ Remains Cautious

--Tokyo March Core CPI Rises 1.1% Y/Y Vs +1.1% in February

     TOKYO (MNI) - The Bank of Japan remains cautious of the overall outlook on

prices, as the annual pace of inflation in Tokyo, a leading indicator of the

national average, was unchanged in March from the previous month.

     Tokyo core CPI rose 1.1% on year in March, unchanged from February, with

the gain still largely due to the higher positive contribution from crude prices

(+0.45 percentage points in March vs. +0.44 pts in Feb).

     In bright spots for BOJ economists to focus on, prices for household

durable goods rose 10.2% on year in March, accelerating from a 5.0% gain in

February.

     Also, foods prices excluding perishable foods rose 0.9% on year, also

accelerating from 0.7% in February. The positive contribution also rose to 0.18

percentage point in March from 0.14 Pt.

     The core-core CPI (excluding fresh food and energy) -- a key indicator of

the underlying trend of inflation -- rose 0.7% on year in March, unchanged from

+0.7% in February.

     Tokyo CPI is a leading indicator of the national CPI for March, due out on

April 19. It indicates that the core CPI in March will rise 0.7% or higher on

year from +0.7% in February.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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