Japan's April Core CPI Slows to 1.4% as Energy Shock Clouds June BOJ Rate Move
Updated
Updated · Reuters · May 21
Japan's April Core CPI Slows to 1.4% as Energy Shock Clouds June BOJ Rate Move
9 articles · Updated · Reuters · May 21
Japan's core CPI rose 1.4% in April—down from 1.8% in March and below the 1.7% forecast—the slowest pace since March 2022.
Fuel and education subsidies drove the slowdown, while a BOJ-watched index excluding fresh food and fuel cooled to 1.9% from 2.4%; education fees alone fell 10.6%.
The softer data has tempered hawkish BOJ signals ahead of the June 15-16 meeting, though markets still widely expect a rate increase to 1% from 0.75%.
Middle East war-driven energy costs could soon reverse the easing: the Strait of Hormuz disruption has lifted oil prices, and Japan's wholesale inflation already hit a three-year high in April.
That leaves the BOJ balancing weaker near-term consumer inflation against the risk that imported fuel costs push underlying inflation back above its 2% target.
Why are some Japanese regions suffering from high inflation while the nation's average cools?
With subsidies masking true inflation, is Japan's central bank walking into a policy trap?