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Japanese core inflation unchanged in March; Tokyo CPI jumps in April

  • Japanese core inflation, which excludes fresh food prices, held steady at 1.3% on year in March but came in below consensus of 1.4%.
  • Core core CPI, which excludes fresh food and energy, slipped to +0.7% from +0.8% in February.
  • Overall inflation increased to 1.6% from 1.5%.
  • Tokyo CPI surged to +2.9% in April from +1.3% in March and core inflation to 2.7% from 1% for the biggest rise since 1992, boosted by the hike in sales tax at the start of the month. Excluding that increase, prices rose just 1%, as in March.
  • The question is whether the Bank of Japan's attempt to push inflation to 2% by 2015 has stalled despite the BOJ's massive bond-buying. If so, the bank might feel the need to increase its asset purchases. (PR)
  • BOJ officials are increasingly concerned that the domestic bond market isn't reflecting how inflation has risen over the past year or so, Bloomberg reports. That raises the risk that yields could suddenly surge. The problem for the BOJ is that yields have stayed low because of its QE program.
  • Meanwhile, President Barack Obama has ended a three-day trip to Japan without sealing a trade deal that's seen as key to the wider 12-nation Trans-Pacific Partnership. While the U.S. and Japan have made a breakthrough on market access, gaps remain.
  • The Nikkei is +0.2% and the USD-JPY is flat at ¥102.33.
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