MNI BRIEF: Japan April Core CPI At 2.2% Vs. March 2.6%

The year-on-year rise of Japan's annual core consumer inflation rate decelerated to 2.2% in April from March’s 2.6%, showing the pass-through of cost increases is weakening, data released by the Ministry of Internal Affairs and Communications showed on Friday.

April’s index remained above the Bank of Japan’s 2% target for the 25th consecutive month.

The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) was 2.4% y/y in April, also slowing from March’s 2.9% for the eighth straight deceleration.

Services prices, a key BOJ focus, were 1.7% y/y in April, slowing from 2.1% in March and indicating that the rise in services prices is weaker than the Bank expected and the corporate price revisions in April were limited.

Bank officials are focused on how wage hikes filter through to retail prices as the rise in labour costs is increasing pressure on firms to raise prices. (See MNI POLICY: BOJ Sees Risk of Earlier Inflation Rebound)