Bloomberg forecasts more rate hikes from BOJ amid rising inflation in Tokyo

Tokyo's inflation rate accelerated in April, hitting a two-year high. The surge strengthens the case for the Bank of Japan (BOJ) to raise interest rates, even as uncertainty lingers over US tariff policies, Bloomberg reports.

Tokyo's core consumer price index (CPI), excluding fresh food prices, rose 3.4% year-on-year in April, surpassing the expected 3.2%. Meanwhile, the overall inflation rate in Japan's capital accelerated from 2.9% in March to 3.5% this month, with the increase largely attributed to last year’s school fee cuts, along with higher costs for food and energy, according to the news agency.

High school tuition fees added 0.48 percentage points to Tokyo's CPI in April. Meanwhile, non-fresh food items rose 6.4%, while rice prices soared 93.8% forcing Japan to import the grain from South Korea for the first time since 1999, Bloomberg notes.

According to Toru Suehiro of Daiwa Securities, inflation in Japan remains solid, prompting the BOJ to signal impending rate hikes at its next policy meeting.