FX.co ★ Tokyo Core Inflation Surpasses Expectations in May

In May 2025, the core consumer price index for Tokyo's Ku-area experienced a 3.6% year-on-year increase, up from 3.4% in April and surpassing market expectations of 3.5%. This represents the most significant rise in over two years, bolstering speculations that the Bank of Japan might consider further tightening its monetary policy. Bank of Japan Governor Kazuo Ueda recently reiterated the central bank’s readiness to adjust its policies as necessary to achieve its inflation objectives. However, he warned that current trade negotiations with the United States are contributing to the economic outlook's uncertainty. Market indicators suggest a growing anticipation of a 25-basis-point rate hike during the Bank of Japan's July meeting. Tokyo's inflation figures are considered a pivotal precursor to nationwide pricing trends.