Japan’s core inflation to slow down in June — Reuters poll

A Reuters poll of economists showed that Japan’s inflation could have slowed down last month. However, that could still push the central bank to raise interest rates, the news agency says. 

The core consumer price index, which includes energy but excludes fresh food, was projected to climb 3.3% from a year earlier. That figure was 3.7% in May.

Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute, says lower gasoline prices last month slowed core inflation despite a surge in rice prices. 

The Bank of Japan is now facing a dilemma. On the one hand, it could raise borrowing costs to curb price growth that has been above the 2% target for more than three years. On the other hand, the central bank could leave rates unchanged as 25% US tariffs on Japanese goods threaten the country’s already fragile economy. 

About half of experts polled by Reuters in June said they do not expect the Bank of Japan to hike rates this year.