JPY: Tokyo CPI Inflation Rises to 2.2% from 1.8%, Rebounding from 26-Month Low
Japan Tokyo CPI inflation reading came at 2.2% YoY in the May month when compared to 1.8% YoY in the April month. Japanese Yen ticked higher after the reading came at higher since 26 months before. BoJ target of 2% inflation is reaching under the way and soon changes in the Policy may happen if this higher level of reading exists in the upcoming months.
USDJPY is moving in Ascending channel and market has reached higher low area of the channel
USDJPY is moving in Ascending channel and market has reached higher low area of the channel
Japan’s Tokyo Consumer Price Index (CPI) inflation rose to 2.2% year-over-year in May, up from 1.8% in April. This increase marks a recovery from April’s 1.8%, which was a 26-month low.
Tokyo’s CPI inflation often trends higher than the national-level CPI, which is typically released three weeks later and serves as an early indicator of broader Japanese inflation trends. The Bank of Japan (BoJ) has maintained a highly accommodative monetary policy, partly due to concerns about declining inflation. This cautious stance has prevented the BoJ from raising interest rates and narrowing the wide rate differential between the Japanese Yen (JPY) and other major global currencies.
JPY: Tokyo CPI Inflation Rises as Expected in May, Remains Sluggish
The inflation rate for Tokyo’s Consumer Price Index (CPI) in Japan reached 2.2% year-over-year in May, up from 1.8% year-over-year in April. This increase marks the highest level in 26 months, prompting a slight appreciation in the Japanese Yen following the data release.
EURJPY is moving in Ascending channel and market has fallen from the higher high area of the channel
The Bank of Japan (BoJ) has set a target inflation rate of 2%, and the current readings suggest that this target is coming within reach. Should this higher level of inflation persist in the coming months, it may prompt the BoJ to consider changes to its monetary policy.
Tokyo’s consumer price index (CPI) inflation grew as expected in May, reflecting a slight increase in spending, but remained at levels that continue to cast doubt on the Bank of Japan’s (BoJ) plans to raise interest rates further this year.
Core CPI inflation, which excludes volatile fresh food prices, rose to 1.9% in May, according to official data released on Friday. This figure matched expectations and increased from April’s 1.6%.
Headline CPI inflation reached 2.2% in May, up from 1.8% in April.
However, the core inflation measure that excludes both fresh food and energy prices—a key metric closely monitored by the BoJ—dropped to 1.7% in May from 1.8% in the previous month, remaining below the BoJ’s 2% annual target.
Tokyo’s inflation data typically serves as an indicator for nationwide inflation in Japan. May’s figures suggest only a marginal increase in consumer spending throughout the month.
The release of Tokyo’s inflation data follows nationwide CPI figures, which showed less-than-expected growth in April.
These lower-than-expected inflation readings have intensified doubts about the BoJ’s ability to raise interest rates further this year, as inflation struggles to meet the central bank’s 2% annual target.
The soft inflation figures occur amid a significant slowdown in Japanese consumer spending over recent months, contributing to weaker-than-expected economic growth in the first quarter.
JPY: Tokyo Consumer Prices Up 1.9% in May
Tokyo’s CPI inflation rose to 2.2% year-over-year in May, up from 1.8% in April. This is the highest level in 26 months, causing the Japanese Yen to strengthen slightly.
GBPJPY is moving in Ascending channel and market has reached higher low area of the channel
With the Bank of Japan’s 2% inflation target now within reach, there could be potential changes to monetary policy if these higher inflation levels continue in the upcoming months.
The latest inflation figures for Tokyo indicate that consumer prices continued to rise in the Japanese capital in May. The rate of increase accelerated from April but remained below the Bank of Japan’s 2 percent target for the second consecutive month.
According to the internal affairs ministry, the consumer price index (CPI) for Tokyo’s 23 wards increased by 1.9 percent in May compared to the same month a year earlier. This index excludes fresh food, which can have wide price fluctuations due to weather conditions.
One factor contributing to the rise was an increase in the fee added to electricity bills to cover the cost of promoting renewable energy. Electricity charges rose by 13.1 percent year-on-year, marking the first increase in 16 months.
Prices for food excluding perishables were up by 3.2 percent, a rate that remained unchanged from April.
Tokyo’s CPI is considered a leading indicator of inflation nationwide, suggesting similar trends may be seen across Japan.
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