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Inflation Indicators in Japan Drop Below 2% in April

Economic data from April heightens uncertainty on the timing of the Bank of Japan’s next interest rate hike

People walk in front of the Bank of Japan building in Tokyo (Reuters file photo).


Key indictors of inflation fell below the Bank of Japan’s 2% target in April for the first time in over a year and a half, data showed on Tuesday.

The news heightens uncertainty on the timing of the BOJ’s next interest rate hike.


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The weighted median inflation rate, among the three indicators closely watched as a gauge on whether price rises are broadening, rose 1.1% in April from a year earlier after a 1.3% gain in March, the data showed.

The trimmed mean index, which excludes the upper and lower tails of the price change distribution, rose 1.8% in April from a year earlier, slowing from the previous month’s 2.2%.

A third index that measures the inflation rate with the highest density in the distribution also rose 1.6% in April, slowing from the previous month’s 1.9% gain, it showed.

The BOJ ended eight years of negative interest rates and other remnants of its radical monetary stimulus in March on the view that sustained achievement of its 2% inflation target has come into sight.

BOJ Governor Kazuo Ueda has said the central bank will raise interest rates from current near-zero levels if underlying inflation accelerates toward 2% as it currently projects.

The data cast doubt on the BOJ’s view that price rises are broadening beyond those driven by rising raw material costs, and likely to be sustained backed by robust domestic demand.


  • Reuters with additional editing by Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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