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

--Tokyo Feb Core CPI Rises 1.1% Y/Y Vs +1.1% in Jan

     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 February from the previous month.

     Tokyo core CPI rose 1.1% on year in February, unchanged January, with the

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

(+0.44 percentage points in Feb vs. +0.40 pts in Jan).

     The February rise was also led by overseas package tours, although at a

slightly slower pace than last month (+10.6% in Feb. vs +13.7% in Jan).

     In one bright spot for BOJ economists to focus on, prices for household

durable goods rose 5.0% on year in February, accelerating from +0.5% in January.

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

the underlying trend of inflation -- rose 0.7% on year in February, also

decelerating from +0.7% in January.

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

on March 22. It indicates that the core CPI in February will rise 0.8% or higher

on year from +0.8% in January.

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

[TOPICS: MAJDS$,M$A$$$,M$J$$$]