Japan Feb consumer prices to rise at fastest pace in 2 years on energy spike - Reuters Poll

FILE PHOTO: People wear protective masks in a shopping district amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, December 14 , 2020. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - Japan's consumer prices likely rose in February at the fastest annual pace in two years, a Reuters poll showed, as rising energy and commodity costs cast a shadow on consumer demand and the country's fragile economic recovery.

But the increase is unlikely to prompt the central bank to dial back stimulus spending programmes, with core consumer inflation still expected to stay well below 2% and the economy lacking momentum, analysts say.

The nationwide core consumer price index (CPI) likely rose 0.6% in February from a year earlier, the median forecast in the poll of 19 economists showed on Friday.

The reading would follow a 0.2% increase in January, and mark the highest since February 2020.

"The global oil market (spike) accelerated price hikes in energy, such as electricity and gas bills, while processed food and hotel prices also increased," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Separate data is expected to show core machinery orders, a leading indicator of capital expenditure, fell 2.2% month-on-month in January to snap three straight months of growth, according to the poll.

Trade data, also due next week, will show Japan ran a trade deficit of 112.6 billion yen ($969 million) in February due to the rising cost of fuel and commodity imports, the poll showed.

Imports are expected to have risen 28% in February, outpacing a 21% year-on-year gain in exports, the poll showed.

The government will release CPI data at 8:30 a.m. on Mar. 18 (2330GMT, Mar. 17), trade data at 8:50 a.m. on Mar. 16 (2350GMT, Mar. 15) and machinery orders data at 8:50 a.m. on Mar. 17 (2350GMT, Mar. 16).

($1 = 116.2500 yen)

(Reporting by Kantaro Komiya; Editing by Kenneth Maxwell)

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