Tokyo¡¯s key inflation gauge has unexpectedly cooled to the slowest pace in four years, complicating the messaging?while not necessarily derailing an expected interest-rate hike from the Bank of Japan?as early as next month.
The consumer price index (CPI) excluding fresh food rose 1.3% in May from a year earlier in the capital, according to figures released by the Ministry of Internal Affairs and Communications Friday. That marked a sixth straight month of cooling and was lower than all but one estimate in a Bloomberg survey of economists.
Meanwhile, a measure that excludes both fresh food and energy ¡ª closely watched by the BOJ as a gauge of underlying inflation ¡ª increased 1.6%. The metric is considered a cleaner read of price trends because it strips out distortions related to subsidies,?but it remains skewed by some food price comparisons after items such as rice saw an unprecedented surge last year.
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