Tokyo CPI Close To Expectations, Detail Still Shows Some Pockets Of Inflation Pressure

Feb Tokyo CPI was close to expectations in y/y terms. The headline was +2.6% y/y, versus 2.5A% forecast and the 1.8% prior outcome. The ex fresh food measure rose 2.5%, in line with expectations (1.8% prior). The ex fresh food, energy metric was 3.1% y/y, also in line with forecasts and compares with 3.3% prior (which was revised from the originally reported 3.1%).

• In m/m terms, headline inflation rose 0.3% (seasonally adjusted) the firmest pace since Oct last year. The core measures were both up 0.1% m/m, while good prices rose 0.3% and services gained 0.2% (same as last month).
• The ex all food and energy index rose 0.3% m/m (not seasonally adjusted), the firmest pace since Oct last year.
• By sub-index, the main drags came from off and fresh food, both down in m/m terms. Most other sub-indices saw either a pick up in m/m inflation or the same pace as prior. Entertainment was +1.1% m/m and household goods +0.8% m/m, were among the strongest contributors.
• In y/y terms it was a similar story, with food items slowing, but a generally firmer trend elsewhere.
• So, whilst core measures were slower in y/y terms versus Jan and are well off 2023 highs, the detail still suggests some underlying inflation pressures are evident.