AI Data Insight
Japan's core CPI index for Q2 (April) 2026 climbed to 113.0, but the year-on-year growth rate was only about 1.4%, lower than the market expectation of 1.7% and hitting a four-year low. The cooling of inflation was mainly suppressed in the short term by the government's energy subsidies and tuition-free education policies, with the core-core CPI also slowing to 1.9%. Although the weak data may undermine the Bank of Japan's rationale for a near-term rate hike, the sharp depreciation of the yen and rising import costs still keep the market highly vigilant regarding subsequent tightening policies.