Japan inflation softens more than expected in April, weakening case for BOJ rate hike
Japan's core inflation rate decreased to 1.4% in April, which is lower than economists' expectations. This decline may reduce the likelihood of an early interest rate hike by the Bank of Japan. Additionally, core-core inflation fell to 1.9%, indicating ongoing challenges in meeting the central bank's inflation target.
- ▪Core inflation in Japan eased to 1.4% in April, below the expected 1.7%.
- ▪Headline inflation also decreased to 1.4%, marking the fourth consecutive month below the Bank of Japan's 2% target.
- ▪Core-core inflation fell to 1.9%, down from 2.4% in March.
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Japan's core inflation eased more than expected in April, coming in at 1.4%, potentially weakening the case for an early rate hike by the Bank of Japan. Core inflation — which strips out prices of fresh food — was lower than the 1.7% expected by economists polled by Reuters and below the 1.8% reading in March.Headline inflation was at 1.4%, down from March's 1.5% and the fourth straight month that inflation was below the central bank's target of 2%.Core-core inflation, which is watched by the Bank of Japan and strips out food and energy prices, fell to 1.9% from 2.4%.The Bank of Japan sharply raised its core inflation outlook to 2.8% from 1.9% at its April meeting, citing higher crude oil prices linked to the conflict in the Middle East and businesses passing on higher costs to consumers.
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