Tokyo Inflation Falls, But BOJ Ready to Raise Interest Rates Again!
Tokyo inflation fell more than expected in December, as food and energy price pressures eased. According to data released on Friday, the consumer price index in the Japanese capital, which excludes fresh food, rose only 2.3% year-on-year, down sharply from 2.8% the previous month. Economists had previously predicted a smaller decline of 2.5%. Overall inflation fell to 2%, while the more in-depth measure excluding energy slowed to 2.6%.
However, despite the decline in headline inflation, it remains above the Bank of Japan's (BOJ) 2% target, indicating that the BOJ is likely to continue further tightening. The BOJ recently raised its policy rate to 0.75%, its highest level since 1995. Governor Kazuo Ueda stated that more rate hikes will be possible if the inflation outlook remains within the bank's target. Despite controlled inflation, the BOJ's policy tightening is considered to be on track, with inflation projected to reach the bank's target in fiscal 2027.
Source: Newsmaker.id
