BOJ Rate Hike Bets Reignite as Tokyo Core CPI Hits 1.9%

Tokyo's core consumer price index (CPI) rose 1.9% year-on-year in August, matching market expectations and keeping alive speculation about further interest rate hikes by the Bank of Japan later this year.

The reading, which excludes fresh food prices, indicates that underlying price pressures in Japan's capital remain persistent, with service prices continuing to climb steadily due to robust domestic demand and rising wages.

The data comes at a critical time for the BOJ, which has been gradually normalizing its ultra-loose monetary policy after ending negative interest rates in March 2024. The central bank has signaled its readiness to adjust rates again if inflation remains sustainably above 2%.