Japan’s core inflation hits highest level since January 2023, putting pressure on BOJ to raise rates

The central inflation rate of Japan has climbed to 3.7% in May, marking its highest level since January 2023 and exercising more pressure on the Bank of Japan to increase rates to combat inflation.

The figure – which removes costs for fresh foods – was higher than the 3.6% expected by economists interviewed by Reuters, and is higher than 3.5% of April.

Rice prices increased by 101.7% over a year, the highest increase of more than half a century.

Japanese rice prices have been in the spotlight lately, the government releasing emergency stocks to moderate the country’s basic food price.

The inflation of the titles reached 3.5%, lower compared to the 3.6% in April. This marks the 38th consecutive month that inflation has exceeded the target of 2% of the BOJ.

The so -called “nucleus” inflation rate, which eliminates fresh food and energy prices and is closely monitored by BOJ, increased to 3.3% compared to 3% in the previous month.

The inflation figure comes as the central bank 0.5% prices held After his monetary policy meeting earlier this week, although he said in his statement This is changing to carry out salary increases at sale prices will continue, supporting central inflation.

Kazuo Ueda cattle battle Last week in the Japanese Parliament said that the central bank would continue to increase rates “once we have condemned more than underlying inflation will approach 2% or oscillate around this level”.

However, the bank provides that inflation will have to decline in the future, adding that “the underlying inflation of the IPC should be slow, mainly due to the deceleration of the economy”.

In addition, Japan GDP also decreased by 0.2% In the quarter finished in March Compared to the previous period as exports decreased, marking the first time in a year that the economy contracted in the quarter.