TOKYO, JAPAN – FEBRUARY 05: Tourists and shoppers walk through the Tsukiji shopping area on February 5, 2026 in Tokyo, Japan.
Tomohiro Ohsumi | Getty Images News | getty images
Japan’s core inflation rate fell for the fourth consecutive month in February as stable food prices calmed the economy, although rising energy prices threaten to push up the cost of living.
The consumer price index fell to 1.3% last month, its lowest level since March 2022 and below the central bank’s 2% target, according to data released on Tuesday. It was down from 1.5% in January.
The core inflation rate, which strips out fresh food prices, declined to 1.6% in February, missing economists’ forecast of a 1.7% rise and compared with a 2% rise in January.
Excluding fresh food and energy prices, so-called “core-core” inflation came in at 2.5%, compared with 2.6% in January.
The Bank of Japan has cut its forecast for core and “core-core” inflation for fiscal year 2026, starting April 1, at 1.9% and 2.2%, respectively.
The central bank has forecast that year-on-year growth in consumer prices could fall to less than 2% in the first half of this year, due to government efforts to reduce the cost of living and stabilize food prices.
Prime Minister Sanae Takaichi promised to suspend the 8% food tax for two years during the election campaign.
Last week, the BOJ kept its interest rate steady at 0.75% as expected, warning of rising inflation risks stemming from the conflict in the Middle East, which has pushed up energy prices.
Japan’s economy grew just 0.1% year-on-year in the fourth quarter of last year, narrowly avoiding a technical recession and slowing from 0.6% growth in the third quarter.
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