May inflation data aligns with expectations, leaving Bank of Japan policy outlook unchanged as core-core CPI remains below 2% target.
Tokyo’s May consumer price index rose 1.6% year-over-year, matching forecasts, while core CPI excluding fresh food held at 1.5% and core-core CPI steadied at 1.9%. All measures stayed below the Bank of Japan’s 2% target, offering no fresh impetus for policy shifts.
April’s core-core CPI drop to 1.9% from 2.3% had already pushed June rate hike expectations lower, and May’s print confirmed no near-term rebound. Energy subsidies and food disinflation continue to weigh, offsetting fiscal-year rent increases and expiring utility subsidies.
USD/JPY traded within a 50-pip range, peaking near 159.65 before settling at 159.20, with key resistance at 160.00 untouched. The 50-period EMA near 158.50 also held firm, reflecting muted market reaction.