Tokyo core CPI rises 1.6 yryr in April vs f39;cast 2.2
Index excluding fresh food, fuel rises 1.8 in April
Service inflation slows in April, may affect BOJ decision
Data highlights uncertainty on BOJ39;s rate hike timing, pace

TOKYO, April 26 Reuters Core inflation in Japan39;s capital slowed much more than expected in April and fell below the central bank39;s 2 target, data showed on Friday, complicating its decision on how soon to raise interest rates.

The reading comes just hours ahead of the conclusion of the Bank of Japan39;s twoday policy meeting, where the board is set to keep interest rates steady and produce fresh quarterly inflation projections through early 2027.

The core consumer price index CPI in Tokyo, a leading indicator of nationwide figures, increased 1.6 in April from a year earlier, slowing from a 2.4 gain in March. It was much lower than a median market forecast for a 2.2 rise.

Services prices rose 1.6 in April from a year earlier, slowing from 2.7 in March, due largely to the Tokyo metropolitan government39;s decision to make some tuition free, the data showed.

A separate index that excludes the effect of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, also showed inflation slowing to 1.8 in April from 2.9 in March. It was the slowest pace of increase since September 2022, when the index rose 1.7 yearonyear.

While core inflation is still above the central bank39;s 2 target, the slowdown…