Tokyo Inflation Moderates but Remains Above BOJ Target, Keeping Pressure for Further Rate Hikes

• Consumer price growth in Tokyo moderated to 2.4% in March, slowing from 2.5% in February, but remaining well above the BOJ's 2% inflation target • The data keeps the BOJ on track to consider further interest rate hikes after its first hike in 15 years earlier this month • Factors like the weak yen, ending fuel subsidies in June, and strong wage growth agreements support further hikes • Signs of manufacturing sector weakness could make the BOJ cautious about tightening too much • Whether strong wage growth spills over to small/medium firms that employ 70% of workers will help determine if momentum continues