Summary

• Japan’s consumer price index eased unexpectedly in April, mainly due to government measures and lower food prices from last year’s high base.
• With underlying inflation steady and growth holding firm, we still expect a Bank of Japan rate hike in June.
• According to the BoJ's outlook, inflation is expected to pick up in the second quarter. Yesterday's data largely aligns with this forecast.

By Min Joo Kang, Senior Economist, South Korea and Japan

Energy subsidies and waivers led to soft inflation print

Japan’s headline inflation slowed to 1.4% year-on-year in April (vs. 1.5% in March, 1.6% market consensus, 1.8% ING). Core inflation was also below the

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