Japan consumer prices rose at a faster pace than economists expected in May, an outcome that could fuel speculation the central bank will raise its inflation forecasts in July and even tweak its stimulus program.
Prices excluding those for fresh food gained 3.2% from a year ago, decelerating from a 3.4% rise in April, the internal affairs ministry reported Friday.
While the national data was consistent with the results of earlier figures for Tokyo showing a renewed slowdown due to lower electricity prices, the reading still outpaced analysts' forecast of a 3.1% increase.
A measure of the deeper inflation trend, meanwhile, continued to strengthen, in another indication that prices have more upward momentum than expected.
Sticky prices will likely feed into economists' view that the Bank of Japan may bump up its quarterly price forecasts in July. Some analysts see a sharp upward revision also triggering an adjustment of the BOJ's yield curve control program.
In the latest quarterly outlook released in April, the bank sees its key inflation gauge averaging 1.8% in the year ending in March. Governor Kazuo Ueda has said prices will slow below 2% toward the middle of the year. For fiscal 2025, the BOJ projects core prices rising 1.6%.
Source : Bloomberg
