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Japan Unemployment Rate 2.6% (consensus 2.5%) in Mar-24

- Japan's unemployment rate for March 2024 remained at 2.6%, slightly higher than consensus estimates, indicating a surprisingly stable labour market.
- The Jobs to Applications Ratio for the same month increased to 1.28, strengthening the already favourable environment for job seekers amid more job openings than applicants.

Japan Policy Rate 0.0% (consensus 0.0%) in Apr-24

• The BOJ has maintained its policy rate at 0.0-0.1%, consistent with market expectations, reflecting ongoing economic recovery with moderate inflation, set against a backdrop of global economic uncertainty.
• Future interest rate decisions will be influenced by global economic conditions, domestic economic performance, inflation trends, and financial market stability, with a vigilant approach towards any necessary adjustments to maintain economic growth and price stability.
• The central bank projects that the economy will continue to grow modestly above its potential. It expects CPI inflation to stabilize around 2% by fiscal 2025 and 2026, supported by government measures and favourable financial conditions.

Japan CPI 2.7% y-o-y (consensus 2.7%) in Mar-24

- Japan's CPI inflation slowed by 0.1 percentage points to 2.7% year-on-year in March 2024, as expected.
- There was some downside news as core inflation slowed by a tenth further than the consensus forecast to reach 2.6%.

Japan Policy Rate 0.0% (consensus 0.0%) in Mar-24

• The Bank of Japan has raised its policy rate to 0.0%, ending the negative interest rate policy in anticipation of achieving its 2% price stability target sustainably.
• This policy shift reflects the BOJ's confidence in Japan's economic recovery, underpinned by improved corporate profits, likely continued wage increases, and the formation of a more solid virtuous cycle between wages and prices.
• Future BOJ policy decisions will hinge on economic activity and price developments, global economic conditions, and the trajectory of inflation expectations and wage growth, with a continued focus on achieving sustainable price stability.