Tokyo Inflation Rises for First Time in Eight Months, Reinforcing BOJ Rate-Hike Path
Tokyo’s core consumer price index rose to 1.6% in May, marking the first increase in eight months and reinforcing market expectations that the Bank of Japan will continue raising interest rates. The overall inflation gauge climbed to 1.7%, aligning with forecasts and underscoring the central bank’s mandate to push price growth toward its 2% target.
The data followed a hawkish message from the BOJ, with board member Naoki Tamura stating that interest rates should be increased every few months toward a neutral level of around 2% to prevent inflation from overshooting. Japanese government bond yields edged higher following the release, with the 5-year yield advancing 1 basis point to 1.890% and the 10-year yield rising 0.5 basis points to 2.630%.
From the sources (25 posts)
@financialjuiceBOJ June meeting summary of opinions: one member said it’s become more suitable to modify monetary support as currency moves raise import costs
@financialjuiceBOJ summary: even after June rate increase, central bank must keep option for further hikes if economy, prices follow forecasts
@financialjuiceBoJ summary: one member says policy rate should be raised toward neutral level as soon as possible
@financialjuiceBoJ summary: one member said central bank must raise policy rate near neutral soon to prevent large, abrupt hikes later
@financialjuiceOne member says Japan's neutral rate is about 2%, BOJ should raise rates every few months
@financialjuiceBOJ summary: Cabinet office representative states BOJ must ensure accountability on rate hike, take proactive, appropriate steps amid excessive economic fluctuations
@financialjuiceBOJ summary: Cabinet Office rep says BOJ must assess macroeconomic effects of shrinking balance sheet, take steps for market stability
@firstsquawkBOJ JUNE MEETING OPINIONS SHOW A HAWKISH TONE, WITH MEMBERS SAYING IT IS APPROPRIATE TO CONTINUE RAISING INTEREST RATES AS FINANCIAL CONDITIONS REMAIN ACCOMMODATIVE AND CURRENCY-DRIVEN IMPORT COSTS ADD TO INFLATION PRESSURES. SOME MEMBERS
@financialjuiceOne member: downside risks to output, employment could disrupt virtuous cycle between wages and prices, possibly drive Japan back into deflation
@financialjuiceOne member warns firms' active price-setting could drive inflation higher
@financialjuiceBOJ summary: one member said even if crude oil prices decline, upward price pressures likely to spread across broader range of items
@businessThe Bank of Japan signaled the need for further increases to the benchmark interest rate in a summary of opinions from a last week’s board meeting, when authorities raised the policy rate to the highest since 1995
@firstsquawkBANK OF JAPAN MEMBERS SIGNAL PUSH FOR REGULAR RATE INCREASES TO CONTROL INFLATION-WSJ
@firstsquawkBOJ’s Ueda, in remarks read by Deputy Governor Himino, said the economy is likely to see slower growth but maintain a gradual recovery.
@firstsquawkBOJ’s Ueda signaled further rate increases in response to the economy and inflation, while saying financial conditions remain easy.
@firstsquawkAccording to BOJ Governor Ueda, further rate hikes will be made as needed based on economic and price developments, while financial conditions stay accommodative.
@firstsquawkAccording to a speech delivered by Deputy Governor Himino on behalf of BOJ Governor Ueda, the timing and pace of future interest rate increases were addressed.
@firstsquawkGovernor Ueda stated that decisions will be guided by evaluating baseline forecasts and risks, while emphasizing the overall stability of Japan’s financial system.
@firstsquawkThe BOJ said it will likely keep raising rates as underlying inflation moves toward 2%, while assessing impacts from Middle East developments, AI investment profitability, and overseas nonbank financial activity.
@financialjuiceBoJ's Governor Ueda: To keep hiking rate in response to economy and prices
@financialjuiceBoJ's Governor Ueda: There is risk underlying inflation may overshoot 2%
@financialjuiceBoJ's Governor Ueda: Timing and pace of future rate hikes will be decided by scrutinising the likelihood of baseline forecasts materialising as well as risks
@businessThe Bank of Japan sees the risk of inflation exceeding its 2% target, Governor Kazuo Ueda says
@financialjuiceBOJ's Tamura: Japan's neutral rate is about 2%
@firstsquawkTamura Says Japan’s Neutral Rate Likely Near 2%, BOJ Board Member States