Overview
- Japan's core consumer price index excluding fresh food slowed to 1.4% year‑on‑year in April, a four‑year low driven largely by government tuition subsidies that temporarily lowered reported costs.
- The BOJ's preferred 'core‑core' gauge, which removes fresh food and energy, eased to 1.9% in April from 2.4% in March, showing softer demand‑side readings after the subsidy effect.
- Wholesale prices jumped at their fastest pace in three years in April as oil and chemical costs rose sharply on disruptions tied to the Iran war and reduced flows through the Strait of Hormuz.
- A weaker yen has raised the local cost of imported energy and goods, increasing the chance that higher wholesale prices will pass through to consumer prices in coming months.
- Markets expect the Bank of Japan to raise its policy rate to about 1% at its June meeting as officials weigh the temporary subsidy drag against mounting external and import‑driven inflation risks.