By Leika Kihara

TOKYO (Reuters – Japan’s core consumer inflation in April should be slightly above the central bank’s 2% target. It will hit a peak of seven years as steep rises in global fuel costs and commodity prices push up the cost to live.

As stubbornly high raw materials costs drive more businesses to raise prices, analysts expect that consumer inflation will hover at 2% over the next few months. This could complicate the Bank of Japan’s attempts to persuade markets to keep its monetary policy loose.

According to Reuters, the nationwide core consumer price Index (CPI), which includes volatile fresh food prices but does not take into account energy costs, rose 2.1% in April versus a previous year.

This is due in part to past phone fee increases that have dissipated. The figure represents the fastest increase rate since March 2015 (when the index rose 2.2%). This follows an increase of 0.8% in the prior month.

Haruhiko Kuroda, Governor of BOJ has stated repeatedly that central banks will not rush to pull its huge stimulus because inflation is expected to rise at a temporary cost.

Analysts disagree with this view, saying that the public’s perceptions about future price movements could shift sharply if inflation continues to be driven by costs.

Naomi Muguruma is a senior market analyst at Mitsubishi UFJ (NYSE): “Even if it keeps monetary policy ultra-loose,” she said. Morgan Stanley (NYSE:) Securities.

According to poll results, separate data suggests that Japan experienced a trade deficit worth 1.15 trillion Japanese yen (8.9 billion dollars) in April. The reason for this was the rising cost of raw materials imports.

The ninth consecutive month would see deficits for the country, which highlights worsening terms in trade for a nation heavily dependent on food and fuel imports.

According to poll, imports increased by 35.0% in April compared with a year ago. This is in contrast to a 13.8% rise in exports.

The government will release data about the trade balance on May 19th at 8:50 (May 18, 2350 GMT) as well as consumer prices data on May 20th at 8:30 (May 19,2330 GMT).

($1 = 129.0600 yen)