The 'core-core' rate of inflation in May (core-core is that excluding food and energy, it's the closest to the US measure of core inflation) inched up on the month. Expectations I had seen for this were for a 2.2% rise, which is the result.
As I posted earlier:
- the BoJ is dissatisfied with the nature of the inflation in Japan. Higher inflation, says the BoJ, is mainly due to 'cost-push' inflation pressure from rising input prices and the weak yen. The BoJ want 'demand-pull' inflation from consumers increasing spending after wage rises. They are still waiting for that as the wage boosts seen in spring feed through. The Bank is under pressure to normalize policy further so they may have to become less fussy on the nature of the inflation they are seeing. The BoJ next meet on July 30 and 31 and a plan on further trimming JGB buys is expected.
USD/JPY is barely changed after the data, around 157.20.
