Japan’s Tokyo core CPI (excluding fresh food) rose 1.5% yoy in April, below expectations of 1.8% yoy and slowing from 1.7% in March. The reading marks the weakest pace since March 2022, suggesting a temporary cooling in inflation momentum. As a leading indicator of nationwide trends, the data points to softer near-term price pressures than markets had anticipated.
The slowdown was largely driven by government subsidies aimed at curbing utility bills and education costs, which have dampened the headline impact of rising prices. Core-core CPI, which excludes both fresh food and energy, also eased from 2.3% yoy to 1.9% yoy, reinforcing the view that underlying inflation has moderated. Headline CPI edged slightly lower to 1.4% yoy, from 1.5% yoy previously.
However, the softer print may prove temporary. Cost-push pressures linked to the Middle East conflict are expected to feed through into energy and broader consumer prices in the coming months.
| Indicator | March | April | Change |
|---|---|---|---|
| Core CPI (ex-fresh food, YoY) | 1.7% | 1.5% | ↓ -0.2 |
| Core-Core CPI (YoY) | 2.3% | 1.9% | ↓ -0.4 |
| Headline CPI (YoY) | 1.5% | 1.4% | ↓ -0.1 |
