Tokyo Inflation Cools on Childcare Support, Backing BOJ Caution

Tokyo’s key inflation gauge unexpectedly slowed on the back of expanded subsidies for childcare, staying below the Bank of Japan’s target in a result that supports the bank’s cautious approach toward resuming interest rate hikes.

The consumer price index excluding fresh food rose 1.5% in April from a year earlier in the capital, the smallest gain since March 2022, the Ministry of Internal Affairs and Communications said Friday. That marked five straight months in which the pace slowed — the longest such streak since 2009 — and was weaker than the median economist forecast of 1.8% growth.