Japanese inflation comes by 3.6%, exceeds BOJ’s goal for three straight years

SApan’s inflation It increased by 3.6% annually in March, noting three years that the number of title inflation is above the target of Bank of Japan 2%.

The figure was a lower than 3.7%observed in February.

The so -called “main” inflation, which releases prices on both fresh food and energy and is closely observed by BOJ, has increased to 2.9% from 2.6% in the month before.

The main inflation in the country – which undresses fresh food prices – came to 3.2%, in accordance with Reuters’s expectations. This was also compared to 3% climbing in February.

The release of data comes when Japan is locked in trade conversations with the United States, with US President Donald Trump writes that “great progress” has been made.

The second largest economy in Asia was affected by 25% in the import of cars in force on April 3, and 25% levied on steel and aluminum came Effective on March 12.

However, Trump stopped his “reciprocal” 24% rates for Japan for 90 days, leaving the base rate of 10%.

The strong figure of inflation would allow Japan’s bank to increase interest rates and normalize its monetary policy.

However, with US tariffs, Japan’s GDP can face down and limit BOJ’s room to speed up.

This opinion was shared by Nomura analysts in a note of April 16, which said they were reviewing their prospects from two hikes to one hike from BOJ from now to March 2027. Nomura now expects Boj only once, in January 2026.

Nomura expects Japan’s real GDP to grow at “near zero” by a quarter quarter in the quarter from July to September 2025 due to Trump’s tariffs.

As such, wage growth, which is a lagging indicator, is likely to fall under pressure in the time of 2026, Shunto or spring salaries negotiations, according to Nomura. This would probably make it difficult for Boj to increase speeds during or after 2026 Shunto.