Japan’s core inflation slowed to 1.4 percent in April, its weakest pace in four years, as government subsidies eased fuel and education costs despite growing pressure from rising global oil prices linked to the Middle East conflict.

Data released Friday showed Japan’s core consumer price index, which excludes volatile fresh food prices, rose 1.4 percent from a year earlier. The figure was slower than the 1.8-percent increase recorded in March and below market expectations of 1.7 percent.

The latest reading marked the slowest pace of core inflation since March 2022.

A sharp 10.6-percent decline in education fees helped pull down overall inflation, offsetting continued price increases in food and other consumer goods.

Meanwhile, a separate inflation gauge closely monitored by the Bank of Japan, which excludes both fresh food and fuel costs, climbed 1.9 percent in April, slowing from 2.4 percent in March.

Analysts said inflationary pressures may accelerate again as higher global oil prices begin feeding into the broader economy following the ongoing conflict in the Middle East.

“Although inflationary pressures eased in April, they will pick up again before long. Accordingly, we still think the Bank of Japan is likely to resume its tightening cycle sooner rather than later,” said Abhijit Surya, senior Asia-Pacific (APAC) economist at Capital Economics.

Financial markets have been unsettled by the Iran war, which has disrupted shipping through the Strait of Hormuz, a key route for global oil and gas supplies. The situation has driven up crude prices and strengthened the U.S. dollar against the yen.

The conflict has complicated the Bank of Japan’s policy outlook by increasing inflation risks while also threatening growth in an economy heavily dependent on imported fuel.

Recent wholesale inflation data showed producer prices accelerated in April at the fastest pace in three years due to higher energy and chemical costs, reinforcing expectations that the central bank may proceed with another rate increase.

Markets widely expect the Bank of Japan to raise its benchmark interest rate to 1 percent from 0.75 percent during its June 15 to 16 policy meeting.

Junko Koeda said policymakers are closely watching how rising wholesale prices are being passed on to consumers.

“I believe it's reasonable to raise the policy interest rate at an appropriate pace to address high inflation while also considering the trade-offs for the economy,” Koeda said.

She warned that rising energy costs could push inflation beyond the central bank’s 2-percent target.

Investors are also expected to closely monitor a speech by Kazuo Ueda on June 3 for signals on the likelihood of a June rate hike.