BOJ Interest Rate Hike Likely Amid Steady Japanese Inflation

The Bank of Japan (BOJ) is expected to raise interest rates by 25 basis points, following steady inflation in Japan's consumer price index (CPI) in August. The core CPI reading, which excludes fresh food and energy prices, grew 1.7% year-on-year, slightly below expectations.

The BOJ has been closely watching the core CPI reading, as it is a key gauge of underlying inflation. A core CPI reading that excludes both fresh food and energy prices remained steady at 1.9% in August.

Japanese inflation has been steadily increasing this year, driven by higher input costs, especially in fuel and energy. Businesses have passed on these increased costs to consumers.