Kremlin Says Russia and Iran Continuing Work on Cooperation Pact, Schedule May Shift 

The Iranian flag is pictured in front of Iran's Foreign Ministry building in Tehran November 23, 2009. (Reuters)
The Iranian flag is pictured in front of Iran's Foreign Ministry building in Tehran November 23, 2009. (Reuters)
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Kremlin Says Russia and Iran Continuing Work on Cooperation Pact, Schedule May Shift 

The Iranian flag is pictured in front of Iran's Foreign Ministry building in Tehran November 23, 2009. (Reuters)
The Iranian flag is pictured in front of Iran's Foreign Ministry building in Tehran November 23, 2009. (Reuters)

Moscow and Tehran are continuing their work on a comprehensive bilateral cooperation agreement, although the schedule of specific events may shift, Kremlin spokesman Dmitry Peskov said on Tuesday, adding Russia intended to develop ties with Iran. 

Earlier Russia's RIA state news agency reported that the agreement had been temporarily suspended due to problems faced by Iranian partners, however Iran's ambassador to Moscow Kazem Jalali said this was not the case, according to a statement carried by Iran's official news agency IRNA.  

Since the state of the war in Ukraine, Russia has moved to strengthen its political, trade and military ties with Iran in a deepening relationship that the United States and Israel view with concern. 

Moscow and Tehran are pushing against what they see as damaging US foreign policy and want to establish what they say would be a fairer multipolar world order. 

Work on a new major agreement between Moscow and Tehran was announced in September 2022 during a meeting between Russian President Vladimir Putin and late President Ebrahim Raisi. 

Raisi, a hardliner seen as a potential successor to Supreme Leader Ali Khamenei, was killed when his helicopter crashed in May. 

In January, Russia's Foreign Ministry had said a new interstate treaty reflecting the "unprecedented upswing" in Russia-Iran ties was in the final stages of being agreed, and Putin and Raisi were expected to sign it soon.  



Japan's Demand-Led Inflation Slows, Clouds BOJ Rate Hike Path

 People visit Ameya-Yokocho shopping street in the Ueno area of Tokyo on June 19, 2024. (AFP)
People visit Ameya-Yokocho shopping street in the Ueno area of Tokyo on June 19, 2024. (AFP)
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Japan's Demand-Led Inflation Slows, Clouds BOJ Rate Hike Path

 People visit Ameya-Yokocho shopping street in the Ueno area of Tokyo on June 19, 2024. (AFP)
People visit Ameya-Yokocho shopping street in the Ueno area of Tokyo on June 19, 2024. (AFP)

Japan's core inflation accelerated in May due to energy levies but an index that strips away the effect of fuel slowed for the ninth straight month, data showed on Friday, complicating the central bank's decision on how soon to raise interest rates.

The slowdown in so-called "core core" inflation, which is closely watched by the Bank of Japan as a key gauge of demand-driven price moves, casts doubt on the bank's view that rising wages will underpin consumption and keep inflation on track to durably hit its 2% target.

The core consumer price index (CPI), which excludes volatile fresh food, rose 2.5% in May from a year earlier, government data showed, accelerating from the previous month's 2.2% gain due largely to a hike in the renewable energy levy. It was roughly in line with a median market forecast for a 2.6% gain.

But inflation as measured by an index stripping away both fresh food and fuel slowed to 2.1% in May from 2.4% in April, marking the lowest year-on-year increase since September 2022.

Private-sector service inflation slowed to 2.2% in May from 2.4% in the previous month, suggesting companies remained cautious about passing on labor costs.

"The Bank of Japan has been arguing that the strong pay hikes agreed upon in this year's spring wage negotiations will eventually provide a boost to services inflation, but so far there's little evidence of that happening," said Marcel Thieliant, head of Asia-Pacific at Capital Economics.

A renewed rise in crude oil prices and the boost to import costs from a weak yen muddle the outlook for inflation.

Analysts expect core CPI to accelerate near 3% later this month due to rising raw material costs. But such pressure could hurt consumption and discourage firms from hiking prices, hampering the BOJ's efforts to keep underlying, demand-driven inflation durably around its 2% target.

"Real wage growth remains weak in Japan and there's no data confirming that demand-driven inflation is accelerating," said Takeshi Minami, chief economist at Norinchukin Research.

"The BOJ probably won't raise rates again at least until October-December this year," he said.

The BOJ exited negative rates and bond yield control in March in a landmark shift away from a decade-long, radical stimulus program.

With inflation exceeding its 2% target for two years, it has also dropped hints that it will raise short-term rates to levels that neither cool nor overheat the economy - seen by analysts as somewhere between 1-2%.

Many economists expect the BOJ to raise interest rates to 0.25% this year, though they are divided on whether it will come in July or later in the year.

BOJ Governor Kazuo Ueda has said the central bank will raise rates if it becomes more convinced that inflation will durably hit 2% backed by robust domestic demand and higher wages.

Recent weak signs in consumption remain a concern. Japan's economy contracted in the first quarter due in part to a 0.7% drop in consumption as rising living costs discourage households from boosting spending.