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MNI BRIEF: BOJ Unlikely To Change FY24, 25 Core-Core CPI View

(MNI) TOKYO

The Bank of Japan board will likely keep its underlying price view measured by the core-core consumer price index in fiscal 2024 and 2025 at October's 1.9% forecast, MNI understands.

Bank officials see no fresh factors to prompt the BOJ to revise core-core inflation in fiscal 2025, although the board may slightly revise down the FY2024 view as the FY2023 view lowers due to the drop in crude oil prices.

BOJ economists will likely explain to the board that they expect the y/y rise of core-core CPI in fiscal 2024 to accelerate again after bottoming below 2.0% about September.

The first force of inflationary pressure resulting from the pass-through of the rise in import prices to consumer prices is weakening as much as bank officials expected in October, however, the second force of inflationary pressure, or the interaction between wages and prices, has not strengthened sufficiently to revise the price view up.

The BOJ board will strongly consider exiting its negative rates policy when it meets in April. (See MNI POLICY: BOJ Mulls Framework Post Likely April Rate Liftoff)

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

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