Japan Releases Jun Tokyo CPI

**Consensus expectations: - CPI Y/Y: 1.6%e v 1.4% prior - CPI (ex-fresh food) Y/Y: 1.6%e v 1.3% prior - CPI (ex-fresh food/energy) Y/Y: 1.8%e v 1.6% prior **Note: BOJ has a 2.0% inflation target - The Mar National CPI remained below target for the 4th straight month (Jan CPI had moved below target for the 1st time in 47 months) Recent comments: - On Jun 17th Bank of Japan (BOJ) raised Target Rate by 25bps to 1.00% (as expected) to resume its tightening cycle (5th overall hike).

Vote to hike was not unanimous (7-1); Asada dissented against the rate hike.

Vote for the revised bond plan was 7-1, with Tamura dissenting for steady rates.

Statement noted to keep raising rates in response to economy, prices.

To pause bond taper from April 2027; To keep monthly pace of JBG buying at around ¥2T. - On Jun 17th BOJ Deputy Gov Shinichi Uchida post rate decision press conference reiterated its overall assessment that the domestic economy had been developing generally in line with BOJ's baseline scenario.

Downside risks for economy had lowered but saw risk for price trend to rise above 2%.

Real interest rates had been negative mainly in short-, medium-term zone.

Financial conditions had been and to remain accommodative.

FX could affect underlying inflation and had larger impact on prices than in past; Would conduct monetary policy appropriately to avoid falling behind the curve. - On Apr 27th BOJ last updated its Quarterly Outlook for Economic Activity and Prices (aka Staff Projections) which raised FY26/27 CPI forecast from 1.9% to 2.8% (**Note: current fiscal year) and raised FY27/28 CPI forecast from 2.0% to 2.8%.

Projections raised FY26/27 CPI Core forecast from 2.2% to 2.6% (**Note: current fiscal year) and raised FY27/28 CPI Core forecast from 2.1% to 2.6%. **Insight: BOJ has raised its key rate five times under the current tightening cycle by a total of 100bps.

The last hike was in Jun 2026 (last meeting)