Japan Kerninflation

The core consumer price index in Japan, which excludes fresh food but includes fuel costs, rose 2.4% year-on-year in September 2024, snapping four straight months of accelerating price growth and posting the lowest reading in five months. However, the latest figure came in slightly above market expectations of 2.3%. Japan’s core inflation rate has remained at or above the Bank of Japan’s 2% target for over two years now, supporting the central bank’s hawkish shift this year. The BOJ raised interest rates in March and July, while signaling willingness to lift rates further. Meanwhile, a board member recently emphasized that the central bank must raise rates at a “very moderate” pace, warning that the BOJ must avoid a drastic change in policy given uncertainties over the global economic outlook and domestic wage growth.