Core inflation in Tokyo reached the Bank of Japan's (BOJ) target of 2% in September, signaling progress in the Japanese economy and bolstering market expectations for future interest rate increases.
According to data released on Friday, the Tokyo core consumer price index (CPI), which excludes the often-volatile costs of fresh food, rose by 2.0% compared to the previous year.
This figure matches both the BOJ's target and the median market forecast. However, it reflects a slowdown from August's 2.4% increase, largely attributed to the government's resumption of subsidies aimed at reducing utility costs.
In addition, a separate index that omits both fresh food and fuel costs—closely monitored by the BOJ for broader price trends—rose by 1.6% year-on-year in September, maintaining the same growth rate as in August.
Service prices also demonstrated upward movement, increasing by 1.2% in September following a 1.3% gain in August. This suggests that companies are beginning to pass on higher labor costs resulting from wage increases, a trend that the BOJ had anticipated.
