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April core CPI rises 3.5% yr/yr vs f'cast +3.4%

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Index excluding fresh food, fuel up 3.0% yr/yr in April

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Data underscores sticky food inflation

By Leika Kihara

TOKYO, May 23 (Reuters) - Japan's core consumer

inflation hit 3.5% in April to advance at its fastest annual

pace in more than two years, data showed on Friday, maintaining

pressure on the central bank to continue raising interest rates.

The data underscores the Bank of Japan's predicament of

balancing price pressures from persistent food inflation against

growth headwinds from U.S. President Donald Trump's tariffs.

The year-on-year increase in core consumer price index

(CPI), which includes oil products but excludes fresh food

prices, compared with a median market forecast for a 3.4% gain

and followed a 3.2% gain in March.

The index thus rose at the fastest annual pace since the

4.2% hit in January 2023, holding above the central bank's 2%

target for more than three years.

Another index, discounting the impact of both fuel and fresh

food and closely monitored by the BOJ as a better gauge of

demand-driven price pressure, rose 3.0% in April from a year

earlier, the data showed. It accelerated from a 2.9% gain in

March.

The BOJ ended a decade-long, massive stimulus programme last

year and in January raised short-term interest rates to 0.5%.

While it has signalled readiness to raise rates further, the

economic repercussions from Trump's tariffs have complicated

decisions around the timing of the next rate increase.