Japan Core Inflation Rate

Japan’s core consumer price index, which excludes fresh food but includes energy, climbed 2.9% yoy in September 2025, accelerating for the first time since May and in line with market forecasts. The latest figure rose from 2.7% in the previous month — the lowest level since November 2024 — and remained above the Bank of Japan’s 2% target. The central bank kept policy rates unchanged at its September meeting, as expected, as the economy faces both domestic and external headwinds, particularly from U.S. tariffs. However, earlier this week, BOJ Policy Board member Hajime Takata reiterated his call for an interest rate hike, citing easing tariff concerns and continued progress toward the central bank’s inflation target. Meanwhile, an index stripping out both volatile fresh food and fuel costs — which is more closely watched by the BOJ as a better gauge of underlying price trends — rose 3.0% in September, easing from a 3.3% increase in August and marking the slowest pace in five months.