Tokyo October core CPI rises 2.6%, reinforcing rate hike expectations
Tokyo's October core CPI rose 2.6% year-on-year, matching forecasts and slowing slightly from September. Analysts say the reading, above the Bank of Japan's 2% target, strengthens the case for further rate hikes, though no change is expected this month.
The Japanese government has reported that the core consumer price index (CPI) for the Tokyo area rose 2.6 per cent in October year-on-year, in line with market expectations and down 0.1 percentage point from September. The core CPI includes petroleum products but excludes fresh food prices.
When fresh food and fuel were also excluded, the annual increase slowed to 2.6 per cent. The overall CPI for Tokyo in October rose 2.8 per cent from a year earlier.
Analysts said the core CPI reading, which is above the Bank of Japan's 2 per cent target, indicates intensifying price pressures and reinforces the central bank's rationale for continuing to raise interest rates. However, markets expect the bank to keep rates unchanged this month.
Separately, Japan's industrial output rose 2.2 per cent in September month-on-month, beating the forecast of 1.3 per cent. A survey by the Ministry of Economy, Trade and Industry showed that manufacturers expect seasonally adjusted industrial output to increase by 5.1 per cent in October and by 0.8 per cent in November.