Data released by the Bank of Japan showed that in April, all key core inflation indicators fell sharply, and for the first time since August 2022 fell below the target level (2%).
According to the report, the weighted median inflation rate - one of the three closely monitored indicators of price pressure - increased by 1.1% per annum, slowing compared to March (+1.3% per annum). Meanwhile, the growth of the trimmed mean index - which excludes the upper and lower tails of the price change distribution - slowed to 1.8% per annum from 2.2% per annum in March. Economists had expected the index to grow by 2.2% per annum. Another index, that measures the inflation rate with the highest density in the distribution, rose by 1.6% per annum after an increase of 1.9% per annum in March.
Overall, the latest data increased uncertainty about further tightening of the monetary policy of the Bank of Japan, which raised interest rates from -0.1% to 0% in March. Earlier, the head of the Central Bank of Japan warned that policymakers would raise interest rates again if core inflation accelerated to 2%.