Investing.com-- Tokyo consumer price index inflation rose slightly more than expected in June as consumer spending picked up some pace, although a key core inflation reading remained largely subdued.
Tokyo core CPI, which excludes volatile fresh food prices, rose 2.1% in June, official data showed on Friday. The reading was higher than expectations of 2.0% after rising 1.9% in May.
A core inflation print that excludes both fresh food and energy prices, which is closely watched by the BOJ as a measure of underlying inflation, grew to 1.8% in June from 1.7% in May. The reading remained close to its weakest level since late-2022 and was also well below the Bank of Japan’s 2% annual target.
Headline CPI inflation grew 2.3%, compared to a 2.2% reading in May.
Inflation from Japan’s capital usually acts as a bellwether for inflation in the country, with Friday’s reading suggesting that price pressures were picking up marginally.
But laggard underlying inflation suggested that inflation will still need to increase more substantially to spur any sort of monetary action by the Bank of Japan.
The central bank has forecast an increase in inflation this year, driven chiefly by higher wages. But consumer spending has so far remained largely subdued.
The yen was little changed after Friday’s reading, remaining well above levels that had attracted government intervention earlier this year.
The BOJ had largely disappointed markets during its June meeting by offering little cues on how it planned to begin tightening monetary policy, following a historic rate hike in March.