Recap – Tokyo inflation accelerates, keeping BoJ under pressure
Core inflation in Tokyo quickened in October, staying well above the Bank of Japan’s 2% target and reinforcing market expectations that policymakers may move toward another rate hike in coming months.
Data released Friday showed the core consumer price index (excluding fresh food) rose 2.8% year-on-year, above forecasts for 2.6% and accelerating from 2.5% in September. The core-core measure (excluding food and energy) also climbed 2.8%, highlighting persistent price pressures despite government subsidies fading.
The gains were driven mainly by higher food costs — including a 38% jump in rice prices — while service-sector inflation remained subdued at 1.6%, suggesting companies are still slow to pass on labour costs.
The release came a day after the BoJ kept its policy rate unchanged at 0.5% in a 7–2 vote, with dissenters warning of rising inflationary risks. Analysts said the latest data support the view that the central bank could raise rates early next year if domestic demand strengthens.
Separate figures showed factory output rose 2.2% in September, beating expectations, while the jobless rate held steady at 2.6%, underscoring continued resilience in Japan’s economy.
This article was written by Eamonn Sheridan at investinglive.com.