Japan’s inflation firmed slightly in March, but underlying dynamics were mixed. Core CPI (ex-fresh food) rose from 1.6% to 1.8% , slightly above expectations but still below the BoJ’s 2% target for a second straight month.
Core-core CPI (excludes both fresh food and energy) ticked down from 2.5% to 2.4% , the lowest level since October 2025. Meanwhile, headline CPI ticked up from 1.3% to 1.5% .
A key factor behind the softer inflation profile is government intervention in energy prices. The abolition of the provisional gasoline tax at the end of last year and continued subsidy programs have helped contain fuel costs. Energy costs fell -5.7% , up from -9.1% . Gasoline down -5.4% , up from -14.9% .
Meanwhile, cost pressures are building at the corporate level. The corporate services price index rose from 2.7% to 3.1% , pointing to increasing input costs across the economy.
| Indicator | Mar | Feb |
|---|---|---|
| CPI Headline | 1.5% | 1.3% |
| CPI Core (ex-fresh food) | 1.8% | 1.6% |
| CPI Core-Core (ex-food & energy) | 2.4% | 2.5% |
| Energy Prices | -5.7% | -9.1% |
| Gasoline Prices | -5.4% | -14.9% |
| Corporate Services Price Index | 3.1% | 2.7% |
