0057 GMT - Tokyo CPI data showing a further broad-based acceleration in inflation suggests that the Bank of Japan may hike even earlier than Capital Economics' current forecast of October. Inflation excluding fresh food climbed to a two-year high in May, while inflation excluding fresh food and energy also picked up to a 17-month high, says Marcel Thieliant, head of Asia-Pacific. With Bank of Japan Gov. Ueda warning that the recent food price shock could spill over into underlying inflation, CE thinks it won't be too long before the BOJ resumes its tightening cycle. "Our forecast is that this will happen in October, but the sheer strength of inflationary pressures leaves the door open for a July rate hike," Thieliant says. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

May 29, 2025 20:57 ET (00:57 GMT)

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