The core inflation print has challenged the Bank of Japan’s commitment to ultra-easy monetary policy.
Food prices in Japan rose by 8.4% from a year earlier in June 2023, after an 8.6% gain in the prior month which was the steepest increase since September 1976. This was the 22nd straight month of food inflation due to a rapid decline in the yen.
The annual inflation rate in Japan edged up to 3.3% in June 2023 from 3.2% in May but less than market forecasts of 3.5%.
BOJ Governor Kazuo Ueda recently stated that there was still some distance to sustainably and stably achieve the central bank’s 2% inflation target, indicating no change to Japan’s ultra-loose monetary settings for the time being.
