The owners of a 70 -year -old “takoyaki” stores, or Octopus balls, a cat at the restaurant while cooking along a street in the Taito Ward district in Tokyo on February 21, 2025.
Richard A. Brooks | AFP | Getty images
Japan inflation increased by 3.6% over a year in March, marking three consecutive years that the figure in pregnancy inflation is greater than the 2% target of the Bank of Japan.
The figure was less than 3.7% observed in February.
The “nucleus-nucleus” inflation rate, which removes fresh food and energy prices and is closely monitored by the BOJ, increased to 2.9% against 2.6% in the previous month.
Basic inflation in the country – which withdraws prices from fresh food – came to 3.2%, in accordance with reuters expectations. This was also compared to the 3% rise in February.
The data press release comes when Japan is locked in commercial discussions with the United States, US President Donald Trump writing that “great progress” has been made.
Asia’s second economy was struck with 25% on automotive imports from April 3, and 25% of steel and aluminum samples came into force on March 12.
Trump, however, suspended his “reciprocal” prices of 24% over Japan for 90 days, leaving a basic rate of 10%.
A strong inflation figure would allow the Bank of Japan to increase interest rates and normalize its monetary policy.
However, with prices from the United States that are looming, Japan GDP could cope with the pressure downwards and forcing the Place du Boj for rate increases.
This point of view was shared by Nomura analysts in a note of April 16, which indicated that they revise their prospects for two hikes to a hike by the Boj of March 2027. Nomura is now expecting the Boj to have passed only once, in January 2026.
Nomura is expecting the real GDP of Japan to develop “near zero” on a quarter-first base from the quarter from July to September 2025 due to Trump prices.
As such, wage growth, which is a late indicator, is likely to be downward pressure at the time of 2026 Shunto, or spring salary negotiations, according to Nomura. It would probably make more difficult for the Boj to hike rates during or after the Shunts 2026.
