FX.co ★ Tokyo Core Inflation Below Forecasts

In December 2025, core consumer prices in Tokyo's Ku-area increased by 2.3% compared to the previous year. This represents a decrease from the 2.8% rise recorded in the prior month and did not meet market forecasts of a 2.5% increase. Despite being the lowest inflation rate since February, it remained above the Bank of Japan's 2% target, underscoring ongoing price pressures in the capital. This data suggests that although the momentum of headline inflation has weakened, underlying pressures persist. Consequently, it is expected that the central bank will proceed cautiously in the process of normalizing monetary policy.