Japan Inflation Rebounds on Middle East Tensions, Core Hits 1.8% as Expected

Japan's latest inflation data shows a modest rebound, with headline CPI accelerating to 1.5% in March from 1.3% and core inflation rising to 1.8% from 1.6%, driven by a 2.1% surge in transport costs—the fastest in four months—amid Middle East tensions. Earlier reports detailed a mixed picture: core-core inflation eased to 2.4% from 2.5%, energy prices softened less sharply to -5.7% due to government subsidies, and corporate services prices accelerated to 3.1% from 2.7%. The developments leave BoJ policy expectations balanced, fostering a cautious outlook for Japan 225 with potential swings from cost pressures and subdued underlying inflation.