EU and US could reach trade deal this weekend - Reuters
Investing.com-- Tokyo consumer price index inflation eased more than expected in July, complicating the Bank of Japan’s interest rate hike prospects amid ongoing political uncertainty in the country.
Tokyo Core CPI, which excludes volatile fresh food prices, grew 2.9% year-on-year in July, compared to expectations of 3.0%, and cooled from the 3.1% seen in the prior month, government data showed on Friday.
A core CPI reading that excludes both fresh food and energy prices was steady at 3.1% in July. The reading is closely watched by the BOJ as a gauge of underlying inflation.
Headline CPI inflation also slowed to 2.9% in July from 3.1% in the prior month.
Tokyo inflation data usually heralds a similar trend from nationwide inflation, with Friday’s data suggesting that inflation cooled from recent peaks.
Data last week showed Japan’s consumer inflation cooled slightly more than expected in June, although the core measure remained above the Bank of Japan’s target.
A series of stronger-than-expected CPI prints before June had ramped up bets that an interest rate hike by the BOJ was imminent.
But BOJ officials have flagged heightened uncertainty over the Japanese economy and the impact of U.S. trade tariffs.
Besides uncertainty from U.S. trade policies, the BOJ also faces rising political risks after the ruling Liberal Democratic Party suffered a bruising defeat in a recent upper house election. This fueled speculation that Prime Minister Shigeru Ishiba might resign.