Japan’s core inflation in January dropped for the third straight month to hit its lowest level in 22 months, matching the central bank’s price stability target.
The core consumer price index, which excludes fresh food, rose 2.0% from a year earlier, a decline from a 2.3% gain in December, according to data released Tuesday by the Ministry of Internal Affairs and Communications.
Weak domestic demand, partly stemming from rising prices as wages remain stagnant, contributed to the economy contracting for a second straight quarter in the October-December period. The Nikkei Stock Average, however, is hitting record highs, which could give the BOJ new impetus to end its negative rate policy.
The Bank of Japan is widely expected to end its negative interest policy, introduced in January 2016, this spring. Some 90% of economists surveyed by QUICK, a Nikkei affiliate, forecast a policy shift in March or April.
Hotel charges grew 26.9% in January, while electricity bills dropped 21%. The overall inflation rate grew 2.2% while the core-core index, which excludes fresh food and energy, gained 3.5%.
