Energy jitters push Japan's core inflation higher as BOJ decision looms

Japan's core inflation rose to 1.8% in March, with core-core at 2.4% and headline at 1.5%, still below the BOJ's 2% target as energy-price worries from the Iran conflict mount. The government has rolled out fuel subsidies and is considering capping gasoline at about 170 yen per liter, and energy costs fell 5.7% in March. Analysts warn higher energy prices could lift inflation toward 3% by 2026 if subsidies aren't expanded, while the BOJ is expected to hold rates at 0.75% at the April meeting. The economy posted modest growth in late 2025, prompting revisions to growth and inflation outlooks.