Overview
- Tokyo’s core consumer price index rose 1.3% year‑on‑year in May, keeping the capital below the BOJ’s 2% goal for a fourth straight month.
- The BOJ‑preferred ‘core‑core’ gauge, which strips out fresh food and fuel, slowed to 1.6% in May from 1.9% in April, signaling a loss of momentum in underlying inflation.
- Government measures such as utility, petrol and education subsidies and emergency fuel supports materially cut measured price gains in May and masked some cost pressures.
- Rising oil and raw material costs and a weak yen continue to push up import prices, creating upward pressure that analysts say could re‑accelerate inflation once subsidies fade.
- Markets still price a near‑term BOJ rate rise toward 1% at the next meeting, but the May prints give cautious policymakers a data point to argue for delay and make nationwide CPI due in about three weeks especially important.