TOKYO (AP) -- Japanese consumer prices rose at their fastest pace in a decade in March due to sharp increases in energy and food costs, the government said Friday, deepening worries that inflation will worsen already shaky consumer sentiment.
The core consumer price index, which excludes volatile fresh food prices, rose 1.2 percent on year in March, following a 1 percent climb in the previous month, the Ministry of Internal Affairs and Communications said.
That was the fastest rise since the index increased 1.8 percent in March 1998. The CPI has risen for six straight months, and March's figure was in line with private economists' forecasts.
For the Japanese central bank, the months ahead will require that policy-making be handled especially delicately. That's because inflation worries might make it hard for the Bank of Japan to loosen monetary policy even if the economy slows. The bank's benchmark rate is at a low 0.5 percent.
Japanese officials and analysts have expressed concern that recent inflation trends don't bode well for the nation's economy, because prices are going up for the wrong reasons.
''The current rise is of an undesirable nature. It is not being caused by stronger consumption demand but by higher costs,'' Economy Minister Hiroko Ota told a news conference Friday.
''Consumption demand is likely to remain weak because workers' wages are not picking up,'' she said.
Shinko Research Institute economist Norio Miyagawa said that Japan's rising prices are an example of ''cost-push-type inflation'' caused by higher expenses rather than stronger demand, and that it's likely to persist at least this year.
The data showed that food and energy costs went up sharply, reflecting the global run-up in commodity and energy prices.
Food product prices rose 1.8 percent on year, while energy prices gained 9.5 percent, the data showed.
The core index covering the Tokyo metropolitan area for April, considered a leading indicator for nationwide consumer prices, also grew a preliminary 0.7 percent on year after climbing 0.6 percent in March, the data showed. The reading beat economists' forecasts of a 0.5 percent rise.