On May 19, Japan’s national inflation accelerated again in April. The core CPI excluding fresh food and energy reached 4.1%, the highest level since the 1980s.
Economists said Japan’s national CPI data for April will likely confirm tentative and somewhat worrying signals from Tokyo’s April CPI data that cost-push inflationary pressures are picking up again.
In our view, this will be enough to prompt the BoJ to raise its inflation forecast again after raising it in April, which would be a step towards ending the negative interest rate policy.
Japan’s Tokyo CPI data for May, which will be released next Friday, is also expected to further confirm the view of stronger inflation, which means that the Bank of Japan’s meeting in June will be closely watched.