市場分析

BOJ's Rate Outlook Clouded as Japan's Core Inflation Jumps

Mellissa · 18 Apr43.2K 閱讀

Image Credit: MSN

Japan's core inflation rose in March, driven by persistent increases in food prices, making it more challenging for the central bank to balance price pressures with potential risks to the economy from higher U.S. tariffs.

The data arrives ahead of the Bank of Japan's (BOJ) policy meeting next week, where the bank is expected to keep interest rates steady at 0.5% and reduce its growth forecasts due to concerns over U.S. President Trump's tariffs.

The core consumer price index (CPI), which includes oil products but excludes fresh food prices, increased by 3.2% year-on-year in March, matching market forecasts and accelerating from February's 3% rise. Core inflation has surpassed the BOJ's 2% target every month for the past three years, signaling persistent price pressures as businesses pass on higher raw material and labor costs.

Inflation, excluding both fresh food and fuel costs—an important indicator for the BOJ—also rose to 2.9% in March from 2.6% in February. Households experienced price hikes on a broad range of goods, including gasoline, hotel bills, and chocolates. Rice prices surged by 92.5% compared to last year.

Services prices increased by 1.4% year-on-year in March, significantly lower than the 5.6% rise in goods prices, showing that the inflation spike was mainly driven by high raw material costs.

Takeshi Minami, chief economist at Norinchukin Research Institute, stated that food prices are expected to remain high due to global weather issues and higher imported food costs. However, he cautioned that Trump's tariffs could negatively impact both domestic and global economies. Minami predicted that the BOJ may delay its next interest rate hike until July or later.

The impact of higher living costs on consumption adds to concerns over the effects of U.S. tariffs, which threaten to hinder Japan's export-driven recovery. Finance Minister Katsunobu Kato voiced concerns about the potential negative impact of these tariffs on Japan's economy and the global economy.

Despite the persistent food price hikes and rising wages keeping inflation above the BOJ's 2% target, the uncertainty caused by Trump's tariff plans has increased fears of a global recession, making it unclear whether the BOJ will be able to continue raising rates. BOJ Governor Kazuo Ueda confirmed that the central bank would proceed with rate hikes but would be cautious due to the heightened economic uncertainty from U.S. tariffs. While the U.S. delayed some tariffs, it has kept 25% duties on aluminum, steel, and automobiles, along with a 10% tariff on other imported goods.