Japan's consumer inflation eased in January for a sixth straight month increasing expectations that the Bank of Japan (BOJ) will have to undertake further stimulus measures to achieve its price target.
The consumer price index (CPI) rose 2.2 percent in January from the year-ago period, government data showed on Friday, compared with Reuters' forecast for a rise of 2.3 percent and down from a 2.5 percent rise in December.
Excluding the effects of the sales tax hike, the nationwide consumer price index (CPI) rose 0.2 percent, below expectations for a 0.3 percent increase and down from 0.5 percent in December.
The core Tokyo CPI for February, considered a leading indicator, rose 2.2 percent on year, unchanged from the previous month and in line with expectations.
"The BOJ has continued to change its wording to explain its CPI outlook: it was 'around 1.25 percent', later revised to 'around 1.0 percent', and now 'CPI is likely to slow for the time being'. As the decline in energy prices has a positive effect on economic growth, further weakness in the CPI due to a fall in oil prices is unlikely to trigger immediate additional [quantitative easing]," Standard and Poor's said in a note before the data were released on Friday.
"We predict that by Q3, inflation is likely to accelerate again. The BOJ will most likely wait patiently until then," it said.
However Marcel Thieliant, Japan Economist at Capital Economics, believes further easing is likely.
"The ongoing slowdown in inflation increases the pressure on the BOJ to introduce more stimulus," Thieliant said, noting that he expects inflation will turn negative in the second quarter.