Japan inflation slows to 2.3% in December as energy bills drop

TOKYO, Japan — Japanese consumer inflation slowed to 2.3% year-on-year in December, down from 2.5% the previous month, as electricity and gas bills declined, government data showed Friday.

The figure for the world's third-largest economy, which excludes volatile fresh food prices, was in line with market expectations.

The data comes ahead of a Bank of Japan monetary policy meeting next week, in which the central bank is widely expected to keep its ultra-loose monetary policy in place.

The BoJ last month maintained its long-standing monetary policy and offered no guidance on its plans for the new year, sending the yen down against the dollar and boosting stocks.

Speculation had been swirling for weeks that the bank would shift away from negative interest rates and a tight grip on bond yields as prices ticked above its two-percent inflation target.

But following the deadly January 1 earthquake that slammed central Japan's west coast, the bank may be forced to maintain its easing policy to shore up the economy, analysts have said.