BOJ Eyes Rate Hike as Japan Inflation Rises to 1.8%

Japan's core inflation rate rose to 1.8% in July, up from 1.6% in June, driven by higher import costs and a weaker yen.

The uptick in inflation has strengthened expectations that the Bank of Japan will raise interest rates from 1% to 1.25% at its meeting on September 17-18, 2026.

A more specific measure of inflation, which excludes fresh food and energy costs, climbed to 1.9% in July, up from 1.7% in June.

This suggests that price increases are spreading across the economy, with companies passing on higher costs to consumers through higher service prices.