By Leika Kihara
TOKYO (Reuters) – Japan’s core consumer inflation hit 3.5% in April to advance at its fastest annual pace in more than two years, data showed on Friday, maintaining pressure on the central bank to continue raising interest rates.
The data underscores the Bank of Japan’s predicament of balancing price pressures from persistent food inflation against growth headwinds from U.S. President Donald Trump’s tariffs.
The year-on-year increase in core consumer price index (CPI), which includes oil products but excludes fresh food prices, compared with a median market forecast for a 3.4% gain and followed a 3.2% gain in March.
The index thus rose at the fastest annual pace since the 4.2% hit in January 2023, holding above the central bank’s 2% target for more than three years.
Another index, discounting the impact of both fuel and fresh food and closely monitored by the BOJ as a better gauge of demand-driven price pressure, rose 3.0% in April from a year earlier, the data showed. It accelerated from a 2.9% gain in March.
The BOJ ended a decade-long, massive stimulus programme last year and in January raised short-term interest rates to 0.5%.
While it has signalled readiness to raise rates further, the economic repercussions from Trump’s tariffs have complicated decisions around the timing of the next rate increase.
(Reporting by Leika Kihara; Editing by Sam Holmes)
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