Japan Core Inflation Exceeds BOJ Target, Cements Near-Term Rate Hike Chance
- On Friday, Japan's annual core consumer inflation exceeded the Bank of Japan's 2% target in September for the first time in nine months, signaling broadening price pressures that support the case for further interest rate hikes.
- Rising fuel costs from the Middle East conflict, elevated import prices driven by a weak yen, and brisk AI demand have blunted government fuel subsidies, driving higher prices across the economy.
- September's consumer price index rose 2.1%, up from 1.7% in August, while the BOJ's preferred 'core-core' gauge—excluding fresh food and energy—accelerated to 2.4% from 1.9% the previous month.
- The Bank raised its key rate to a 31-year high of 1.25% last month, signaling a shift toward guarding against underlying inflation overshooting its target and raising the prospect of additional rate adjustments.
- While the Bank is set to stand pat on policy next week, BOJ Governor Kazuo Ueda may revise inflation forecasts upward, signaling readiness to keep pushing up borrowing costs amid persistent price pressures.
35 Articles
35 Articles
Consumer prices in Japan rose by 2.1 per cent annually in September, as reported by the Ministry of the Interior and Communications.
Global Market: Japan’s core inflation accelerates, putting BOJ rate hikes in focus
Japan’s core inflation rises to 2.1% in September, exceeding the Bank of Japan’s 2% target for the first time in nine months. Higher energy costs, yen weakness and AI-related demand could strengthen the case for further interest rate hikes.
Higher fuel costs, expensive imports and price pressure from AI reduced the impact of state energy subsidies. At the interest rate meeting next week, however, the BOJ is expected to remain silent.
Japan braces for rate hike as inflation accelerates
Inflation in Japan accelerated sharply in September, official data showed on Friday, rising above the Bank of Japan's (BoJ) target level and paving the way for a further interest rate hike. The acceleration was driven in particular by rising prices for processed foods against a backdrop of soaring energy costs owing to the conflict in the Middle East. Excluding volatile fresh produce, inflation was 2.1 percent, up from 1.7 percent in August, acc…
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