Tokyo Inflation Surges to 2.7% as Yen Fails to Gain

Tokyo's core inflation rate rose to 2.7% year-on-year in September, exceeding market expectations and outpacing previous readings.

The data, released on Friday, also showed that headline CPI climbed to 2.7%, up from 1.9% in the prior month, while the Bank of Japan's preferred measure, core CPI excluding both food and energy, advanced to 3.0%, compared with 2.0% previously.

This suggests that inflation is spreading beyond fuel and electricity prices, but the market reaction was surprisingly muted, with the USD/JPY pair briefly dipping below 158.00 before stabilizing and rebounding.