Tokyo inflation came in softer than expected in September, with core CPI (ex-fresh food) unchanged at 2.5% yoy versus forecasts of 2.8% yoy. The moderation was largely attributed to measures by the metropolitan government, including cuts to childcare fees and water charges, easing some of the burden from rising living costs.
Core-core inflation, stripping out fresh food and energy, slowed sharply from 3.0% yoy to 2.5% yoy, while headline CPI was also steady at 2.5% yoy. Food inflation excluding fresh items cooled to 6.9% yoy from 7.4% yoy, highlighting a broadening slowdown in price pressures.
The weaker data may give the BoJ some breathing room, though markets still price another 25bps hike in the months ahead. Opinion remains divided on whether policymakers act as soon as October or hold off until January.
 unchanged at 2.5% yoy versus forecasts of 2.8% yoy. The moderation was largely attributed to measures by the metropolitan government, including cuts to childcare fees and water charges, easing some of the burden from rising living costs.){kind=link}