Japan Core CPI Hits Four-Year Low at 1.4%, Clouding BOJ Hike Path

Japan’s April core CPI slowed to a four-year low of 1.4% y/y while the BOJ-preferred core-core measure eased to 1.9%, confirming earlier expectations of a third consecutive print below the 2% target. The softer data, released on 22 May, reinforced views that the Bank of Japan may remain patient on rate hikes despite some analysts still eyeing a June move. Asian equities advanced, with the Nikkei surging more than 2%, while major USD/JPY crosses stayed in tight ranges ahead of the U.S. Memorial Day weekend. Traders also noted the PBOC’s stronger-than-expected USD/CNY fix and Philip Lane’s upcoming remarks at the Asian Monetary Policy Forum.