Japan’s consumer price index (CPI) data for March indicates persistent inflation, with key underlying measures exceeding the Bank of Japan’s target. This persistence complicates the central bank’s policy outlook as tariff uncertainties loom.

Key CPI Insights

• Headline CPI: +3.6% YoY (compared to +3.7% in February).

• Core CPI: +3.2% YoY, presenting challenges for monetary policy.

Implications for BOJ Policy

• Hike Expectations: Rate hike forecasts have shifted from May to July amid ongoing global tariff discussions.

• Market Analysis: The BOJ will navigate economic pressures while assessing the implications of international trade negotiations.

As inflation remains a challenge, the upcoming BOJ meetings will be critical in determining the bank’s monetary policy direction.