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Y/Y Tokyo CPI Rebounds, But Not Much Inflation Pick Up Outside Of Utilities Rise

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May Tokyo CPI was close to expectations, both the headline and ex fresh food y/y outcomes, at 2.2%y/y and 1.9%y/y respectively, were in line with market expectations. The showed sequential improvement on the April outcomes as well. The core measure which excludes fresh food and energy was 1.7%y/y down from April's 1.8% outcome. The measure which excludes all food and energy was 1.2% y/y, versus 1.4% in April.

  • In terms of m/m outcomes, the headline measures also saw a pick up compared to April's drop. This was led by goods prices rising 0.9% m/m, versus April's +0.4%. Services prices were -0.1%m/m, paring April's -0.9% drop.
  • By sub-categories, education fell 0.4%m/m, compared to April's -9.4%, which was impacted by subsidies. transport was -0.2%m/m, while entertainment fell -0.4%. On the plus side utilities rose 3.5% m/m, after a +0.6% rise in April.
  • Outside of the utilities rise there wasn't much sign of firmer inflation pressures, particularly in the services sector. At the margin this shouldn't add any hawkishness to the BoJ outlook.

Fig 1: Tokyo CPI Y/Y Trends

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May Tokyo CPI was close to expectations, both the headline and ex fresh food y/y outcomes, at 2.2%y/y and 1.9%y/y respectively, were in line with market expectations. The showed sequential improvement on the April outcomes as well. The core measure which excludes fresh food and energy was 1.7%y/y down from April's 1.8% outcome. The measure which excludes all food and energy was 1.2% y/y, versus 1.4% in April.

  • In terms of m/m outcomes, the headline measures also saw a pick up compared to April's drop. This was led by goods prices rising 0.9% m/m, versus April's +0.4%. Services prices were -0.1%m/m, paring April's -0.9% drop.
  • By sub-categories, education fell 0.4%m/m, compared to April's -9.4%, which was impacted by subsidies. transport was -0.2%m/m, while entertainment fell -0.4%. On the plus side utilities rose 3.5% m/m, after a +0.6% rise in April.
  • Outside of the utilities rise there wasn't much sign of firmer inflation pressures, particularly in the services sector. At the margin this shouldn't add any hawkishness to the BoJ outlook.

Fig 1: Tokyo CPI Y/Y Trends

Keep reading...Show less