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TOKYO, April 21 Reuters Japan39;s consumer inflation held steady above the central bank39;s target in March and an index excluding fuel costs rose at the fastest annual pace in four decades, data showed, indicating broadening price pressure in the world39;s thirdlargest economy.

The data may keep alive market expectations that the Bank of Japan BOJ could begin to phase out later this year a massive stimulus programme that has drawn public criticism for distorting bond markets and crushing financial institutions39; margins.

Inflationary pressure is proving stronger than expected and could last for longer than thought, said Shinke Yoshiki, chief economist at Daiichi Life Research Institute.

But there39;s still a lot of uncertainty on whether wages will rise durably and underpin consumption, which may keep the BOJ in a holding pattern.

The core consumer price index CPI, which excludes volatile fresh food, but includes energy costs, rose 3.1 in March from a year earlier, government data showed on Friday, matching a median market forecast.

It followed February39;s increase of 3.1, which was a sharp slowdown from January39;s 41year high of 4.2, due largely to the effect of government subsidies to soften the cost of utility bills for…