Japan’s core consumer inflation rate slowed to 1.4% in April, a figure lower than economists’ expectations, according to government data released Thursday. The report from the Statistics Bureau of Japan provides new information for the Bank of Japan (BOJ) as it considers future monetary policy adjustments.
The core consumer price index (CPI), which excludes volatile fresh food prices, fell from 1.8% in March, according to the data. The result was below the median forecast of 1.7% from economists surveyed by Reuters.
Headline inflation, which includes all items, registered at 1.4%, a slight decrease from the 1.5% recorded in March. This marks the fourth consecutive month that the headline figure has remained below the Bank of Japan’s 2% inflation target. A separate index monitored by the central bank, which excludes both fresh food and energy costs, also declined, falling to 1.9% from 2.4% the previous month.
The April inflation figures contrast with the Bank of Japan’s own revised forecast from its April meeting, where it raised its core inflation outlook for the fiscal year to 2.8%. At the time, the central bank cited factors such as higher crude oil prices and the ability of businesses to pass on increased costs to consumers.
Separately, the government has been addressing rising energy costs. Japanese public broadcaster NHK reported that Prime Minister Sanae Takaichi has indicated a willingness to consider a supplementary budget. This follows a proposal from opposition lawmakers for a 3 trillion yen ($18.8 billion) package to extend fuel subsidies and provide relief for electricity costs.
The inflation data is released against a backdrop of a depreciating yen, which has increased the cost of imports and affected consumer purchasing power. Government reports indicate approximately 10 trillion yen was spent on currency market interventions at the end of April and the beginning of May.
Despite the currency situation, Japan’s economy showed signs of resilience in the first quarter of 2026, recording a 2.1% annualized expansion. The growth, which surpassed initial expectations, was supported in part by strong export performance.
In a note released Thursday, analysts at DBS suggested that the country’s economic growth could provide the Bank of Japan with the confidence to consider a rate hike in the future. The central bank has maintained its ultra-low interest rate policy while other major economies have raised rates to combat inflation.
