— Japan Feb Core CPI +0.1% Y/Y; MNI Median Forecast -0.1%
— Japan Feb CPI Posts 1st Y/Y Rise In 5 Months; Jan -0.1%
— Central Tokyo Mar CPI -0.3% Y/Y; MNI Median Forecast -0.3%
— Central Tokyo FY11 CPI -0.3% Y/Y Vs -0.9% in FY10
— Japan Feb CPI Energy Costs +5.2% Y/Y Vs Jan +5.7%

TOKYO (MNI) – Japan’s core consumer prices unexpectedly posted the
first year-on-year rise in five months in February, backed by continued
high energy bills and a rise in grain prices, data released Friday by
the Ministry of Internal Affairs and Communications showed.

The core reading, which excludes perishables but includes energy,
rose 0.1% in February from a year earlier after a 0.1% fall in January,
while beating the median economist forecast for -0.1% in a MNI survey.

Total national CPI rose 0.3% on year in February after rising 0.1%
in January, marking a second straight rise.

Overall energy costs in February rose 5.2% from a year earlier,
decelerating from +5.7% in January and +6.9% in December.

The pace of increase in electricity charges accelerated to 6.9% y/y
in February from +6.6% in January while the y/y rise in gasoline prices
slowed to +3.4% in February from +4.6% in January. The recent surge in
retail gasoline prices began in March.

The price of domestically grown rice surged 9.2% on the year in
February.

National CPI excluding food and energy, or the U.S.-style core CPI,
dropped 0.6% in February following a 0.9% decline in January,
maintaining a long-term downtrend.

Meanwhile, central Tokyo core CPI fell 0.3% in March following a
0.3% drop in February, matching the median forecast for a 0.3% fall in a
MNI survey.

In fiscal 2011, central Tokyo core CPI fell an average 0.3%,
marking a third straight drop, following declines of 0.9% in fiscal 2010
and 1.6% in fiscal 2009.

CPI figures date to 1970 under the 2010 base year.

Amid brighter global growth prospects and unabated rises in energy
costs, the latest government consumer confidence survey released last
month indicated a slight increase in inflation expectations.

The percentage of people forecasting higher prices in a year’s time
rose to 63.4% of the total on an unadjusted basis in February, up from
63.1% in the previous month.

Oil Information Center weekly data showed that the national average
of regular gasoline prices were lower to flat in the first half of
February and posted modest week-to-week gains in the second half.

Reflecting heightened tensions in the Middle East, crude oil and
refined petroleum product prices began to surge in March. The average
price of regular gasoline in Japan this week stayed at the highest level
in nearly three and a half years, rising to Y157.6 ($1.90) per liter, or
$7.22 per gallon, from Y155.6 last week.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **

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