Utilities costs, including fuel, light and water charges, fell 5.5% in February from a year earlier. Electricity and gas prices declined 8% and 5.1%, respectively. <\/p>\n
The Nikkei 225 index rose over 2% following the inflation data amid a broader rebound in Asian markets Tuesday. The yen was little changed following weeks of depreciation, last trading at 158.59 against the U.S. dollar. <\/p>\n
The central bank has projected that year-on-year increase in consumer prices may fall below 2% in the first half of this year, due to government efforts to ease living costs and stabilize food prices. Prime Minister Sanae Takaichi had pledged to suspend an 8% food tax for two years during the election campaign. <\/p>\n
![\"NextEra](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/03\/108281786-17742911431774291141-44764555384-1080pnbcnews.jpg\")
<\/p>\n
Elevated food prices have been a central subject in political debates, as rising costs for daily necessities contributed to two major electoral setbacks for the ruling Liberal Democratic Party before Takaichi took office in October. <\/p>\n
Inflation in rice prices eased further, slowing to 17.1% in February from 27.9% in the prior month. <\/p>\n
Last week, the BOJ held its interest rate steady at 0.75%<\/a> as expected while cautioning upside risks to inflation stemming from the war in the Middle East, which has sent energy prices soaring. <\/p>\n “The [Middle East] conflict is an unwelcome surprise,” said Stefan Angrick, head of Japan and frontier markets economics at Moody’s Analytics, as surging commodity prices push up inflation driven by a potential supply shock \u2014 “bad news for an energy and food importer such as Japan.”<\/p>\n While the impact to the economy may be limited if the Middle-East conflict ends relatively soon, a prolonged war may deal a heavier blow, Angrick said, who expects the BOJ to raise rates in June or July. <\/p>\n Japan’s economy expanded just 0.1% year-on-year in the fourth quarter<\/a> last year, narrowly avoiding a technical recession and slowing from 0.6% growth in the third quarter. <\/p>\n