BOJ Faces Pressure as Tokyo Core Inflation Hits 2.7%

The Bank of Japan (BOJ) is facing mounting pressure to increase interest rates as core inflation in Tokyo accelerated in September. The core consumer price index, which excludes fresh food but includes fuel costs, rose 2.7 per cent in September from a year earlier, exceeding the August gain of 1.8 per cent and outpacing the 2.4 per cent threshold that would reinforce expectations of a follow-up BOJ hike.

The Tokyo data is considered a leading indicator of nationwide trends and will influence the BOJ's fresh quarterly inflation forecasts due at its next policy meeting on October 29-30. The BOJ's decision to increase interest rates in September was a closely watched event, with two board members voting against the move.