Market in Tokyo in June 2023.
Richard A. Brooks | Afp | Getty Images
Japan’s headline inflation rate fell to 2.3% in October, the lowest rate since January and down from 2.5% seen in September.
The core inflation rate, which excludes fresh food prices, came in at 2.3%, down from September’s 2.4%. However, the figure was slightly higher than the 2.2% expected among economists polled by Reuters.
Japan’s central bank has long stated that its goal is an “ideal cycle between wages and prices.” A weak inflation reading could mean the bank still needs to maintain an easy monetary policy stance.
A separate reading of inflation, known as the “core” inflation rate – which excludes fresh food and energy prices – rose to 2.3%, above September’s figure of 2.1%. This metric is also tracked by the Bank of Japan.
According to LSEG data, 55% of economists polled by Reuters on November 22 expected the Bank of Japan to raise rates by 25 basis points at its December meeting, which would bring the benchmark policy rate to 0.5%.
On Nov. 18, BOJ Governor Kazuo Ueda said the economy was heading toward sustained wage-driven inflation, and warned that borrowing costs would remain low, Reuters reported.
The BOJ also said in its latest opinion summary that if prices and Japan’s economy develop as expected, the policy rate could reach 1% in the second half of fiscal year 2025 at the earliest.
