economy
Japan Core Inflation Softens to Over Four-Year Low, Weakening Case for BoJ Rate Hike
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.
TL;DR
- Japan's core inflation eased to 1.4% in April, the lowest since March 2022 and below economists' expectations.
- Headline inflation also decreased to 1.4%, marking the fourth consecutive month below the Bank of Japan's 2% target.
- The core-core inflation rate, excluding food and energy, fell to 1.9%.
- Energy prices saw a decline, influenced by factors such as the Iran war and government subsidies.
- The Nikkei 225 rose and the yen weakened slightly following the inflation data.
- Despite easing inflation, Japan's economy grew by 2.1% annualized in the first quarter, supported by exports.
- The Bank of Japan had previously raised its core inflation outlook, anticipating price pressures from higher crude oil and business cost pass-throughs.
- Japan is also grappling with a weak yen, having intervened in currency markets, increasing import costs and reducing consumer purchasing power.