Japan's Core Inflation Holds Firm Amid Rate Hike Expectations

Tokyo's core-core consumer price index, which excludes both food and energy, rose 2% year on year in August. This measure of underlying inflation remains above zero and provides a timely data point ahead of broader national releases.

The Tokyo core-core CPI reading offers a gauge of domestic demand-driven inflation trends by stripping out the effects of swings in fresh food and energy costs.

The Bank of Japan is likely to take note of this solid print, which holds steady at their target rate. We believe that this keeps pressure on the central bank to consider further interest rate hikes in their upcoming autumn meetings.