MNI BRIEF: Trimmed Mean Rises To 3.1% Vs. Apr 3.0% - BOJ

Japan's trimmed mean measure of underlying inflation accelerated to 3.1% y/y in May from April's 3.0%, indicating continued pass-through of cost increases, despite falling y/y import prices, Bank of Japan data released Tuesday showed.

The accelerated trimmed mean to 3.1% came after data released on Friday showed Japan's annual core consumer inflation rate rose 3.2% y/y in May, slowing from April's 3.4%, for the 14th straight month above the 2% target (see: MNI BRIEF: Japan May Core CPI Rises 3.2% Against Apr's 3.4%). Tuesday's data showed the mode rose a record high of 2.9% y/y in May, the fourth straight month above the BOJ's 2% target, accelerating from April's 2.8%.

The BOJ expects the y/y rise of core CPI to fall below 2% toward the middle of fiscal 2023.

The board’s median forecasts for the core inflation rate in fiscal 2023, 2024 and 2025 are 1.8%, 2.0% and +1.6%. The 2023 core CPI will be revised up in July when policymakers update their medium-term view. Some Bank of Japan board members, however, expect stronger prices (see: MNI BRIEF: Board Members Note Stronger Prices - BOJ Opinions), while one member saw greater chance that the y/y rise in the core consumer price index will not fall below 2% at the June 15-16 meeting.