Japan - March trimmed mean CPI
The BOJ's calculation of trimmed mean CPI moved up in March to 1.1% YoY, equal with the previous record high in the series last reached in 2008. The details though were a little soft.
The BOJ's calculation of trimmed mean CPI moved up in March to 1.1% YoY, equal with the previous record high in the series last reached in 2008. The details were a little soft, in the sense that the proportion of items within the CPI with rising prices fell back a touch. The change wasn't large, and the headline still seems to be following the stronger leads. But that the diffusion was marginally soft does introduce a slight note of caution when assuming that inflation will rise strongly from here.
That in turn offers some support for the BOJ's stance that inflation momentum in Japan is less broad-based than in the US and Europe. That view is the BOJ's justification for maintaining the current policy stance, and consistent with that, today the bank again announced unlimited purchases of JGBs to hold down yields.
Despite that, I'd guess that the BOJ is thinking about how to use the current market circumstances to allow more steepening of the curve. The next opportunity for an update on the bank's strategy will come with its monetary policy meeting on Thursday.
