April core CPI slowed to a four-year low. Fuel costs and education subsidies restrained inflation, while the instability of energy prices leaves the risk of a renewed increase. The BOJ is carefully considering the timing of a rate hike and will assess the June meeting.
Japan's core CPI rose 1.4% year on year in April, falling to a four-year low. The impact of fuel costs and education subsidies kept price growth in check, weakening overall inflationary pressure.
However, some believe that concerns over energy supplies, against the backdrop of the situation in the Middle East, could once again push prices higher. Inflation risks are therefore expected to change depending on developments going forward.
BOJ Board Member Koeda Junko (小枝順子) said the central bank is carefully analyzing the extent to which higher wholesale prices are being passed through to consumer prices and assessing the pace and timing of future rate hikes. The June meeting is expected to provide clues on the rate decision, with particular attention being paid to trends in demand indicators.