Japan's core inflation rises to a new two-year high, increasing pressure on the Central Bank to raise interest rates.

Jin10 data June 20 news, Japan’s core inflation rate in May rose to 3.7%, higher than the market expectation of 3.6% and the previous value of 3.5%, marking the highest level since January 2023, which further increased the pressure on the Bank of Japan to curb inflation through interest rate hikes. This data, excluding fresh food prices, exceeded the 3.6% expected by economists surveyed by Reuters and also showed an increase from 3.5% in April. Japan’s overall inflation rate in May was 3.5%, lower than 3.6% in April. This marks the 38th consecutive month that the inflation rate has exceeded the Bank of Japan’s 2% target. The core-core inflation rate, closely monitored by the Bank of Japan (excluding fresh food and energy prices), rose from 3% last month to 3.3%. Before the release of the latest inflation data, the Bank of Japan decided to maintain the benchmark interest rate at 0.5% at its monetary policy meeting earlier this week. However, the bank stated in its announcement that the transmission of wage increases to sales prices is still ongoing, which supports core inflation.