Highest inflation in Tokyo in over three decades makes things tough for BOJ

 While Tokyo’s inflation is finally approaching the 2% level targeted by the BOJ, the April figures are unlikely to prompt the central bank to cut back its monetary easing

The cost of living in Tokyo rose at the fastest pace in almost three decades in April, as the impact of soaring energy prices became clearer, an outcome that complicates the Bank of Japan’s messaging on inflation and the need for continued stimulus. Consumer prices excluding fresh food in the capital climbed 1.9% from a year ago, according to the ministry of internal affairs Friday. Barring the impact of sales tax hikes in 1997 and 2014, that was the fastest pace of gains since December 1992.

Fastest Tokyo inflation in decades complicates BOJ’s messaging The gauge jumped after the drag on the price index from sharp cell phone fee cuts a year ago started to drop out of calculations. Analysts had forecast prices to rise 1.8%. While Tokyo’s inflation, a leading indicator of the national price trend, is finally approaching the 2% level targeted by the BOJ, the April figures are unlikely to prompt the central bank to cut back its monetary easing.The central bank demonstrated its stance last week when it doubled down on its efforts to keep borrowing costs at rock bottom levels….