Japan Core Inflation Hits 4-Year Low

Japan’s core consumer price index, which excludes fresh food but includes energy, rose 1.4% year-on-year in April 2026, easing from 1.8% in the previous month and coming in softer than market forecasts of 1.7%. The latest reading marked the lowest level since March 2022 and remained below the Bank of Japan’s 2% target for a third straight month, as government fuel subsidies helped offset price pressures from higher oil costs linked to the Iran war. Meanwhile, the index excluding the effects of volatile fresh food and fuel, which is closely watched by the Bank of Japan as a better gauge of demand-driven price movements, rose 1.9% in April, marking the softest increase since July 2024. The BoJ will meet on June 16, after keeping its short-term policy rate at 0.75% last month amid higher oil prices and yen weakness. The policymakers remained cautious about the uncertain situation in the Middle East, although several members still saw scope for near-term interest rate hikes.
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