18.05.201800:47:00UTC+00Japan Consumer Inflation Slowed Further in April

Japan's underlying inflation rate was 0.7 percent in April, slowing from the month earlier amid a smaller contribution from energy prices, government data.

The year-on-year change in the core consumer price index, which excludes fresh food prices because of their volatility, stayed positive for the 16th consecutive month, the Ministry of Internal Affairs and Communications said.

Core inflation, which is the focus of the Bank of Japan's 2 percent inflation target, increased 0.5 percent in 2017.

However, the pace of gains slowed from 0.9 percent in March, highlighting the challenge the Bank of Japan faces in achieving its 2 percent inflation target even with aggressive monetary easing.

The "core-core" CPI, which excludes both fresh food and energy prices, slid 0.4 percent year on year in April after holding at 0.5 per cent for the previous two months.

Marcel Thieliant, senior Japan economist at Capital Economics, said the moderation of price growth “underlines that the Bank of Japan won't be able to tighten monetary policy anytime soon”.

The yen was little-changed after the inflation figure was announced. Economists expect inflation to rebound moderately during the second half of the year, thanks to higher energy prices and modestly rising wages. The output gap, a broad measure of supply and demand, points to rising capacity shortages that should support capital investment.