Japan April consumer inflation seen exceeding central banks 2% goal: Reuters poll

div classBodysc17zpet90 cdBBJodivpBy Leika Kiharap

pTOKYO Reuters – Japan‘s core consumer inflation in April is expected be slightly higher than the central bank’s 2 target, hitting a sevenyear peak as sharp climbs in fuel and global commodity costs push up the cost of living.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pAnalysts expect consumer inflation to hover around 2 in the coming months as stubbornly high raw material costs force more firms to hike prices, complicating the Bank of Japans efforts to convince markets it will keep monetary policy ultraloose.p

pThe nationwide core consumer price index CPI, which excludes volatile fresh food costs but includes energy costs, is projected to have risen 2.1 in April from a year earlier, a Reuters poll showed.p

pAlso driven by the dissipating effect of past cellphone fee cuts, the figure marks fastest pace of increase since March 2015, when the index jumped 2.2. It follows a 0.8 rise in the previous month.p

pBOJ Governor Haruhiko Kuroda has repeatedly said the central bank will be in no rush to withdraw its massive stimulus on the view that the expected costpush rise in inflation will be temporary.p

pSome analysts disagree, arguing that public perceptions of future price moves could change sharply if the costdriven increase in inflation persists.p

p“Even if the BOJ keeps saying it will keep monetary policy ultraloose, markets will read ahead and may start pricing in the chance of a future policy tweak,” said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.p

pSeparate data is likely to show Japan suffered a trade deficit of 1.15 trillion yen 8.9 billion in April due to the surging cost of raw material imports, the poll showed.p

pIt would be the ninth straight month of deficits, highlighting worsening terms of trade for a country heavily reliant on fuel and food imports.p

pImports likely surged 35.0 in April from a year earlier, outpacing a 13.8 increase in exports, according to the poll.p

pThe government will release the trade balance data on May 19 at 8:50 a.m. May 18, 2350 GMT and the consumer price data on May 20 at 8:30 a.m. May 19, 2330 GMT. p

p1 129.0600 yenp

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pp Reporting by Leika Kihara Editing by Edwina Gibbsp

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