FX.co ★ Tokyo Core Inflation Below Forecasts in Sept

In September 2025, core consumer prices in Tokyo's Ku-area increased by 2.5% compared to the previous year, maintaining the pace set in August and falling short of the anticipated rise to 2.8%. Despite this shortfall, inflation remained above the Bank of Japan's target of 2%, prompting speculation about a possible interest rate hike later in the year. Minutes from the Bank of Japan's July meeting revealed that policymakers were willing to continue tightening monetary policy if economic conditions and price levels developed as expected. Although the Bank of Japan kept rates steady at its September meeting, there were two dissenting views, indicating that additional hikes may be on the horizon. The decision to pause further rate increases is largely influenced by concerns over the potential impact of US tariffs on Japan's export-dependent economy.