Japan’s Core Consumer Price Index (Core CPI) in Tokyo, a crucial gauge of the nation’s inflation trajectory, saw a modest increase of 1.6% year-on-year in April, the government announced today. This uptick represents a deceleration from the 2.4% growth recorded in March. Notably, the Core CPI excludes prices in the fresh food category.
Tokyo’s April core CPI figure fell short of analysts’ projections, who had anticipated a 2.2% rise, and remained below the Bank of Japan’s (BOJ) inflation target of 2%. This underperformance may pose challenges for the BOJ in considering any further interest rate hikes in the near future.
The report highlights a slowdown in prices within Tokyo’s services sector, which increased by 1.6% year-on-year in April, down from a 2.7% growth observed in March.
Moreover, the Core-Core CPI index, excluding fuel and fresh food prices, serves as a key indicator closely monitored by the BOJ for broader inflation trends. This index slowed to 1.8% in April from 2.9% in March, marking the slowest increase since September 2022.
The latest inflation data underscores persisting challenges in achieving the BOJ’s target inflation rate. While Tokyo’s April figures show signs of moderation, they also signal a need for continued monitoring and potential adjustments in monetary policy to support sustained economic growth and price stability.