Japan's core inflation rises to 2.1%, exceeding target for first time since December
Costlier energy and a weak yen are pushing up prices in Japan. The Bank of Japan is expected to hold rates next week but keep the door open to further hikes.
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Japan's core inflation rose above the central bank's 2% target in September for the first time since December. Consumer prices excluding fresh food were 2.1% higher than a year earlier, data released on Friday showed, after the rate had stayed below 2% in August. The figure matched economists' expectations. Headline inflation also reached 2.1%.
More closely watched is the measure excluding both fresh food and energy, which the Bank of Japan focuses on: it rose to 2.4%. According to Reuters, higher fuel costs linked to the prolonged Middle East conflict are pushing up living costs and blunting the effect of government subsidies. A weak yen is adding to the pressure by making imports more expensive.
The central bank raised its policy rate to 1.25% in September, a 31-year high. No change is expected at its October 29-30 meeting, Reuters reported, though the bank may raise its inflation forecast. Standard Chartered expects the next hike in January 2027 but sees December as possible. The yen strengthened after the data.