Tokyo's inflation rate surpassed Bloomberg economists' forecasts in March

Tokyo's consumer prices excluding fresh food rose 2.4% in March from a year earlier, surpassing Bloomberg's 2.2% consensus forecast, driven by rising semi-finished products costs. Overall inflation rate accelerated further to 2.9% from February's 2.8%.

The dynamics of the consumer price index may prompt Bank of Japan Governor Kazuo Ueda to reconsider interest rate hikes. Recent economic data indicates inflation is progressing steadily toward the central bank's target.

Bloomberg's experts survey indicates thecountry's monetary authority is likely to hike rates in June or July, aligning with its baseline scenario. However, some analysts now see a non-negligible chance of earlier action in May.

Service sector inflation in Tokyo rose to 0.8% year-on-year in March, up from 0.6% in February, the Bank of Japan is monitoring this reading to gauge underlying price trends in the economy.