Japan's April core inflation drops to 1.4%, softening BoJ rate hike expectations

The weaker-than-expected inflation print reduces immediate pressure on the Bank of Japan to raise rates.

By Handelsavisen Newsroom · Automated 2026-05-21 23:45 UTC · 1 min read

Japan's core inflation, which excludes fresh food prices, fell to 1.4% in April, marking a sharper decline than anticipated.

This development weakens the case for an early rate hike by the Bank of Japan, which has kept its policy rate steady at 0.75% amid ongoing economic uncertainty.

8% in April. Analysts had expected a more hawkish stance from the BoJ following earlier signs of economic resilience, but the latest figures suggest a more cautious approach may be warranted.

The inflation slowdown aligns with broader global trends of easing price pressures, though it contrasts with recent data from the UK, where inflation also declined to 2.8% in April.

Analysts had expected a more hawkish stance from the BoJ following earlier signs of economic resilience, but the latest figures suggest a more cautious approach may be warranted.

The Bank of Japan's decision to maintain its current rate was supported by a split 6-3 vote, according to prior reports.

This outcome reflects the central bank's balancing act between supporting economic recovery and managing inflation risks.