Japan's May consumer inflation tops BOJ target for 2nd straight month — RTRS

FXStreet · 24 Jun 2022 395 Views

Reuters reported that Japan’s annual core consumer inflation topped the central bank’s target for a second straight month in May, data showed on Friday, highlighting the intensifying pressure on the country’s fragile economy from soaring global raw material costs.

  • Headline CPI 2.5% YoY, expected 2.9%, prior was 2.5%. (This remains the Bank of Japan’s 2% target for a second straight month, following a 2.1% rise in April).
  • CPI excluding Fresh Food 2.1% YoY, expected 2.1%, prior was 2.1%.
  • CPI excluding Food, Energy 0.8% YoY, expected 0.4%, prior was 0.8%.

Key notes

''The data challenges the Bank of Japan’s view that the recent rise in prices is temporary, and doesn’t warrant a withdrawal of monetary stimulus.''''The nationwide core consumer price index

''Rising fuel and food prices, blamed on Russia’s invasion of Ukraine and a weak yen that inflates the cost of imports, are expected to keep Japan’s core consumer inflation above the BOJ’s 2% target for most of this year, analysts say.''

''But there is little to cheer for the BOJ, which views such cost-push inflation as temporary and a risk to consumption, with households facing rising living costs and slow wage growth.''

''BOJ Governor Haruhiko Kuroda has repeatedly said the central bank will keep monetary policy ultra-loose until robust domestic demand and strong wage growth become key drivers of inflation.''