FX.co ★ Japan Core Inflation Surpasses Expectations in April

In April 2025, Japan's core consumer price index (CPI)—which excludes the prices of fresh food but incorporates energy costs—rose by 3.5% compared to the same month the previous year. This increase follows March's 3.2% rise and slightly surpasses market predictions, which anticipated a 3.4% rise. This figure represents the highest level observed in over two years, supporting the expectation that the Bank of Japan will continue to tighten its monetary policy in response to persistent inflationary pressures. Core inflation has consistently remained at or above the BOJ's 2% target for more than three years, largely due to continuously high food prices and increasing wages. Governor Kazuo Ueda of the Bank of Japan has signaled a readiness to raise interest rates further, albeit cautiously, as policymakers remain vigilant about the potential economic impact of US tariffs.