Inflation in Japan in March slowed to the lowest since September

According to the Ministry of Internal Affairs and Communications of Japan, consumer prices in March increased by 3.2% year-on-year. Thus, inflation slowed down compared to the February value of 3.3% and became the lowest since September 2022.

In particular, the growth of transport services was the weakest in the last six months – 1.6% against 1.7% in February. The cost of utilities fell by 2.8% after a decrease of 0.3% in the previous month, mainly due to the fact that electricity has become much cheaper (-8.5%).

At the same time, food prices in Japan rose by 7.8%, which was the highest increase since September 1980. In February, the rise was 7.5%. The growth of prices for medical services accelerated from 0.9% to 1.3%.

Clothing has risen in price by 3.6%, educational services – by 0.9%. The pace of price increases in these categories remained at the February level.

Consumer prices in Japan excluding fresh food (a key indicator tracked by the country's Central Bank) in March increased by 3.1% compared to the same month of the previous year. This indicator coincided with both the February indicator and the average forecast of analysts. Inflation excluding food and energy increased to 3.8% from 3.5%.

On a monthly basis, prices increased by 0.3% in March. In February, they fell by 0.6%, which was the first decline since October 2021.