Today we got the inflation in Japan for the Tokyo region

Inflation for all of Japan will be known at the end of April, but it will be practically the same as in the Tokyo region - Figure 1 and Figure 2.

Headline CPI YoY increased to 2.59% (from 2.50% in February), while Core YoY decreased to 2.91% (from 3.12% in February). Generally speaking, the March data show that inflation is starting to become a bit sticky. The monthly change in core inflation in March is +0.28% (in February +0.19%)! – Figure 3.

With rising Energy and Fresh Food prices, the monthly headline CPI change was as much as 0.37%!

But this is exactly what the BoJ expects, to get inflation stable at the 2% target (toward the end of projection period, which is March 2026). Such inflation will allow for a withdrawal from non-standard monetary policy, and the virtuous cycle from higher wages to higher spending will boost the economy. Unfortunately, one may have doubts…

How do Japanese policy board members view all this? Just take a look at the SOO (Summary of Opinions at the Monetary Policy Meeting) we got yesterday… and more on that in the next post.