Japanese inflation accelerated to 2.8 percent in February, data showed Friday, staying above the Bank of Japan’s two-percent target meant to fight stagnation.
The year-on-year rise in prices excluding volatile fresh food was in line with market expectations and followed an increase of 2.0 percent in January.
The Bank of Japan (BoJ) has pursued policies aimed at encouraging inflation in order to bring the world’s fourth-largest economy out of harmful deflation, with the figure hitting or exceeding its target of two percent for almost two years.
But the central bank has long said inflation needs to be driven by demand and higher wages instead of temporary factors like higher energy costs.
This week, the BoJ ended its outlier negative interest rate policy — also aimed at encouraging inflation — but said “accommodative financial conditions will be maintained for the time being”.
The comments sent the yen lower against the dollar by more than one percent.
Rises in petrol costs, processed food prices and hotel fees were the main upwards contributors to the core consumer price index (CPI) in February.
The monthly figure was partly offset by falling prices for gas bills.
Stripping out both fresh food and energy, Japan’s prices rose 3.2 percent, against market expectations of 3.3 percent and edging down from 3.5 percent in January.
Last Friday, Japan’s largest trade union secured its biggest wage hike since 1991, a result the BoJ’s governor previously called “an important factor” ahead of the move to end the negative rate policy.
