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Tokyo CPI Headline Misses, But Core-Core Fresh Y/Y Highs


Tokyo CPI prints for May were mixed. The headline y/y coming in weaker at 3.2%, versus 3.4% forecast and 3.5% prior. Headline CPI is now some distance below Jan highs of 4.40%. We saw the exact same outcomes for the measure which excludes fresh-food (3.2% y/y, versus 3.4% expected). The core measure which excludes both fresh-food and energy was in line with expectations though, +3.9%, versus 3.8% prior.

  • This is a fresh high for the core measure in y/y terms since 1982. Looking at the sub-categories, we saw 6 out of 10 record faster y/y momentum compared to Apr. Utilities, down -7.3% y/y, was a big drag on the softer headline result (down -4.1% m/m).
  • All categories saw m/m increases except for household goods and utilities, (while housing was flat).
  • Overall goods inflation was -0.2% m/m, while services rose 0.1%, slightly down from the recent pace of 0.2-0.3%.
  • Market reaction has been limited, USD/JPY drifting up from session lows to 140.00 (earlier lows were at 139.87, as US equity futures softened).

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