Japan’s Tokyo CPI figures for October showed broad-based acceleration in inflation, adding to pressure on the BoJ but stopping short of forcing an immediate policy move. Core CPI (excluding fresh food) climbed from 2.5% to 2.8% yoy, beating expectations of 2.6%. Core-core measure (excluding fresh food and energy) matched that rise, also hitting 2.8%, while headline inflation accelerated from 2.5% to 2.8%.
The increase was driven partly by a 38.4% surge in rice prices and the expiration of water-fee subsidies, which lifted utility costs. Food inflation, excluding fresh items, remained high at 6.7%, though slightly slower than September’s 6.9%. Meanwhile, services inflation was relatively steady at 1.6%, well below the 4.1% gain in goods prices. The mix suggests cost pressures are persistent but not yet translating into sustained demand-led inflation.
At its meeting yesterday, the BoJ left the policy rate unchanged at 0.50%. Governor Kazuo Ueda said the likelihood of the Bank’s baseline projection materializing had “heightened somewhat,” but reiterated that the BoJ wants to await “a bit more data” before considering another rate hike. He emphasized the need to observe whether firms continue to raise wages in response to higher U.S. tariffs before committing to further tightening. Overall, the latest inflation data and BoJ remarks reinforce expectations that the next rate hike remains a coin toss between December and January.
 climbed from 2.5% to 2.8% yoy, beating expectations of 2.6%. Core-core measure (excluding fresh food and energy) matched that rise, also hitting 2.8%, while headline inflation accelerated from 2.5% to 2.8%.){kind=link}