Japan: Inflation accelerates in March from February
Latest reading: Consumer prices rose 1.5% in annual terms in March, following a 1.3% rise in the previous month.
Relative to the previous month’s data, there were higher price pressures for transportation (+2.1% on a year-on-year basis vs +0.5% in February) and energy (-5.7% vs -9.1% in February). In contrast, price pressures reduced for food in March (+3.6% vs +4.0% in February). Finally, the change in housing prices was the same as in the prior month (+1.0% in March and February).
Meanwhile, core consumer prices were up 1.8% on a year-on-year basis in March, following a 1.6% rise in the previous month.
Lastly, consumer prices were up 0.44% in March in month-on-month terms, following a 0.62% decline in the prior month.
Panelist insight: Nomura’s Uichiro Nozaki and Kyohei Morita said:
“While the impact of the [U.S.-Iran] conflict will be felt quickly in gasoline prices, government subsidies will cap the retail price of gasoline at around ¥170/l over the near term, curbing the rise in inflation in 2026 H1. At the same time, the impact on electricity and gas charges will be felt in stages from around summer 2026 via higher prices for LNG and coal. The impact of higher crude oil prices could spread from energy-related sectors to sectors such as chemicals, transportation services, and foods.”