"January's data is unlikely to provide grounds for additional rate hikes," said Ahn, who, like most economists, believes the Bank of Korea's monetary tightening cycle ended last month.
Investors shrugged off the data. The 10-year treasury bond yield was down 4.3 basis points at 3.196% at 0039 GMT, tracking overnight moves by U.S. Treasuries.
A breakdown of the data showed January public utility costs had risen 4.6% from the previous month while agricultural products had jumped 6.2%, leading the index higher. Petroleum products fell 2.8%. The core CPI, which excludes volatile food and energy prices, was up 4.1% in January on a year earlier, as it was in December, when annual core inflation eased for the first time in 13 months. The Bank of Korea said in a separate statement that the tick-up in the inflation rate was in line with its expectations. The annual rate would be just as high in February, around 5%, it said.
At their policy meeting on Jan. 13, most of the Bank of Korea's board members were seen turning cautious about additional interest rate rises, though the board voted on that day to raise rates by 25 basis points to 3.50%. Meeting minutes were released two days ago. (Reporting by Jihoon Lee and Choonsik Yoo; Editing by Bradley Perrett)
