According to the Zhitong Finance APP, Tokyo inflation, as a leading indicator of nationwide inflation trends in Japan, exceeded expectations in March, providing a rationale for the Bank of Japan to further raise interest rates. Data released on Friday showed that Japan's core CPI in Tokyo, excluding fresh food, rose 2.4% year-on-year in March, up from a previous value of 2.2% and the median economist forecast of 2.2%, also surpassing the predictions of all surveyed economists; Japan's CPI in Tokyo rose 2.9% year-on-year in March, unchanged from the previous value and slightly above the economist forecast of 2.8%. Following the data release, the USD/JPY exchange rate dipped slightly, standing at 150.79 at the time of writing. The latest inflation data may prompt Bank of Japan Governor Kazuo Ueda to consider the appropriate timing for further interest rate hikes. Although the tariff policies implemented by U.S. President Trump have darkened the global economic outlook, recent domestic data from Japan indicates that the Bank of Japan has made progress in achieving its stable inflation target, fueling speculation about the timing of the next interest rate hike. While most economists expect the Bank of Japan to wait until June or July to raise rates under baseline scenarios, many suggest that the Bank may hike rates earlier at the May monetary policy meeting. Nobuyasu Atago, chief economist at Rakuten Securities and former Bank of Japan official, stated, "The strong rise in food prices excluding fresh food, along with increases in prices for household durable goods and services, suggests that the Bank of Japan should accelerate its pace of rate hikes. I believe there is still a possibility of another rate hike in May." Thursday's overnight swap index indicated that the likelihood of the Bank of Japan raising rates at the May meeting is about 25%. Some economists are skeptical about whether the Bank will raise rates in May, especially after Trump announced a new 25% tariff on imported cars starting April 2. Due to the continued depreciation of the yen and rising raw material and labor costs, companies are continuing to pass costs onto consumers. Data released on Friday showed that price pressures from food inflation persist, with non-fresh food prices rising 5.6% year-on-year, including a nearly 90% surge in rice prices. According to Teikoku Databank, major food companies raised prices on 2,343 products in March, approximately three times the number from a year ago, and they plan to further increase prices at the start of the new fiscal year in April. Service prices also rose 0.8% year-on-year, higher than last month's 0.6%, marking the largest increase since December of last year. This service price indicator is closely monitored by the Bank of Japan to help assess potential inflation. Taro Kimura, an economist at Bloomberg Economics, stated, "The Tokyo March inflation data exceeded market consensus, which aligns with other signs indicating that underlying inflation trends are likely to reach the Bank of Japan's 2% target by summer, providing a rationale for further rate hikes by the Bank of Japan." Japan's current benchmark interest rate is 0.5%, the lowest among the Group of Seven (G7) countries. Kazuo Ueda defended the Bank of Japan's gradual approach to normalizing monetary policy, stating that Japan's underlying price trends remain slightly below the Bank of Japan's 2% target—despite the fact that Japan's main national inflation indicators have been at or above the Bank of Japan's 2% target for nearly three years