By Megumi Fujikawa
TOKYO--Japan's consumer inflation has stayed above the Bank of Japan's 2% target for two years, government data confirmed Friday, amid speculation over further interest-rate increases.
Overall consumer prices rose 2.7% from a year earlier in March, compared with the 2.8% increase seen in February, the data showed. While the cost of gas was lower than a year ago, food inflation, including prices of fresh food and eating-out, recorded growth.
That continued an upward trend started in April 2022, when inflation rose above the BOJ's target for 2% for the first time in 13 years. It has since stayed above that level.
Economists say inflation could rise at a faster pace in the coming months if the government phases out utilities subsidies as planned at the end of May.
"If inflation continues to evolve in line with the BOJ's projections, further tightening this year may be incoming," said Capital Economics assistant economist Gabriel Ng.
The BOJ's policy board is scheduled to release its quarterly outlook on prices next week.
In March, the bank ended negative interest rates and other easing measures, saying it has become more confident about achieving its inflation target sustainably.
The yen's fall to a nearly 34-year low against the dollar could also give inflation a boost because a weak yen pushes up prices of imports like energy and food.
BOJ Gov. Kazuo Ueda has said the bank would discuss policy action if the yen's depreciation significantly affects the bank's inflation forecast.
In a joint statement Wednesday, finance ministers of Japan and South Korea acknowledged "serious concerns" over their respective currencies' recent depreciation.
The statement came as the greenback rose to new intraday highs against the yen earlier in the week.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
04-18-24 2223ET
