MADRID, 24 May. (EUROPA PRESS) –
The reference inflation rate in Japan, which excludes the impact of the price of fresh food, stood at 2.2% year-on-year in April, four tenths below the March reading, according to data published this Friday by the Ministry of the Interior and Communications of the Japanese country.
In the case of the general inflation rate, the CPI for April stood at 2.5%, two tenths below the reading of the previous month, while the underlying inflation rate, which in addition to 2.93, 2%, its lowest level since September 2022.
“Core inflation will continue to moderate, as the recent weakening of the yen will not provide much of a boost to import prices,” said Marcel Thieliant, head of Asia Pacific at Capital Economics, who expects the underlying rate to fall below the 2% in July.
“The result is that, while we still expect the Bank of Japan to make a final rate hike at its July meeting, we are increasingly confident in our view that it will not be able to tighten monetary policy much further,” he warned.
At its meeting on April 26, the Bank of Japan Policy Council unanimously decided to maintain the short-term reference rate in a range of 0% to 0.1%, unchanged from its previous meeting, thus delaying the expected tightening of the Japanese country’s monetary policy.
On the other hand, the Japanese central bank revised downwards its growth forecast for the country in 2024, to an expansion of 0.8% from the 1.2% anticipated in January, while maintaining the forecast for 2025 and is confident that in 2026 Japan’s GDP will grow by 1%.
Regarding inflation, the entity revised the reference CPI forecast (without fresh food) four tenths upwards, to 2.8% in 2024, and to 1.9% from 1.8% in 2025. while by 2026 it expects a price increase of 1.9%.
However, the entity kept its core inflation forecasts unchanged at 1.9% this year and next, while the rate will reach 2.1% in 2026.