The Tokyo core consumer price index (CPI), which excludes fresh food but includes fuel costs, exceeded the BOJ's 2% target for nine straight months.
The slowdown was mostly due to the effect of government energy subsidies to curb soaring utility bills, the data showed.
It marked the fastest year-on-year pace of increase since August 1991, when the index also rose 3.2%.
Service inflation, which the BOJ sees as key to achieving sustained wage growth, perked up to 1.3% in February from 1.2% in January, the data showed.
Nationwide core consumer prices rose 4.2% in January from a year earlier, hitting a fresh 41-year high, as an increasing number of companies passed on higher costs to households.