Japan’s consumer inflation set to pick up, still far from BOJ target: Reuters poll

TOKYO (Reuters) – Core consumer inflation in Japan likely accelerated in March from a year earlier, but was still well below the Bank of Japan’s price target, according to a Reuters poll, reinforcing the view that the BOJ will lag far behind other central banks in policy normalization.

Separate data is expected to show Japan’s trade balance remained deep in the red, fueling concerns over soaring fuel and raw material import costs, while the yen weakened to a 20-year low. years against the dollar this week adds to the pain.

Next week’s data would underscore the challenge for Japan’s central bank. The weak yen has become a hot political issue as lawmakers demand action to cushion the blow of rising inflation.

National Core Consumer Price Index (CPI) data, to be released by the Home Office at 23:30 GMT on April 21, is likely to have risen 0.8% in March from the year earlier, faster than a 0.6% gain in February, according to the poll of 18 economists. shown Friday.

“The pace of core CPI increases has likely returned to pre-pandemic levels,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“The national core index likely picked up in March as import inflation strengthened on the weak yen, rising crude oil and commodity prices.”

Still, rising headline inflation doesn’t mean the BOJ would be rushing to cancel its monetary stimulus anytime soon. On the contrary, the central bank should stick to its strong stimulus package for some time, given that the current cost-driven inflation is far from sustainable, analysts say.

Its long-elusive inflation target is 2%.

Trade data, to be released by the Ministry of Finance at 23:50 GMT on April 19, will likely show that Japan’s trade balance remained in deficit at 100.8 billion yen in March, down from 668.3 billion yen the previous month. .

Imports likely jumped 28.9% in the year to March, outpacing a 17.5% gain in exports, according to the poll.

(Reporting by Tetsushi Kajimoto; Editing by Kim Coghill)

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