Japan core inflation hits four-year low in April but war-driven rebound seen ahead
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Japan's core CPI rose just 1.4% in April, a four-year low driven by government subsidies, but analysts warn the Iran war will push inflation sharply higher in coming months Summary: Japan's core CPI, excluding fresh food, rose 1.4% year-on-year in April, the slowest pace since Ma
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4 itemsJapan wholesale prices surge 4.9% as Iran war drives import cost spike
The desk anticipates that Japan's recent surge in wholesale prices will compel the Bank of Japan (BOJ) to consider a more aggressive tightening stance at its upcoming June meeting. Per the full note [source], the corporate goods price index rose 4.9% year-on-year in April, significantly outpacing the 3.0% forecast, driven by a 17.5% spike in import prices and an alarming 83.2% month-on-month increase in naphtha prices. This inflationary pressure, exacerbated by geopolitical tensions in the Middle East, suggests that the BOJ may face mounting pressure to adjust its policy framework sooner than previously anticipated. The current market consensus is increasingly leaning towards a rate hike, reflecting a tightening window for the BOJ to maintain its gradual approach amidst these escalating cost pressures.
Japan April CPI preview: core inflation seen slipping further below BOJ target
Japan: Tokyo area April CPI headline 1.5% y/y (expected 1.7%, prior 1.4%)
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