Core CPI aligns with expectations, easing pressure on the BOJ to adjust rates ahead of next week’s meeting.
Japan’s core consumer price index rose 1.6% year-on-year in June, matching forecasts and marking a slight increase from May’s 1.4%. The data left USD/JPY little changed, as both headline and core inflation landed in line with expectations.
Headline CPI climbed 1.7%, up from 0.5% in the prior period, while core-core CPI, excluding food and energy, slowed to 1.7%—below the 2% forecast and the softest pace since August 2022. This divergence suggests underlying price pressures are easing despite elevated energy costs.
The Bank of Japan is expected to hold rates steady at its July 30-31 meeting, with the yen’s near-term direction likely driven by external factors such as oil prices and US rate expectations rather than domestic inflation data.