Tokyo consumer price gains lost steam in March

TOKYO–Tokyo’s core consumer prices rose in March at a slightly slower pace, indicating a lack of extra momentum in nationwide inflation after it reached halfway to the Bank of Japan’s 2% target last month.

The core CPI, which excludes fresh food prices, rose 0.8% in March from a year earlier, data from the Ministry of Internal Affairs and Communications showed Friday.

The result came in lower than a 0.9% forecast by economists polled by the Nikkei and February’s 0.9% rise. The core CPI excludes volatile fresh food prices.

Tokyo CPI is seen as an early indicator of nationwide numbers. In recent months, the national index has been around 0.2 percentage points higher than the Tokyo result.

The nationwide core CPI for February rose 1% on year, the fastest pace since August 2014, after excluding the impact of the 2014 sales tax increase, according to ministry data released last week.

Separate employment data showed slightly less tightness in the labor market, though unemployment remains near a multi-decade low.

Japan’s jobless rate was 2.5% in February, after falling to 2.4% in January, the lowest level since April 1993.

Another indicator showed there were 158 jobs available to 100 job seekers in February, slightly lower than the 44-year high of 159 in the previous month.

Policy makers hope tightness in the labor market will help put upward pressure on wages and give a tailwind to Japan’s efforts to spur a virtuous economic cycle in which rising wages, consumption and prices create a feedback loop.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

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