Japan Tokyo Core CPI

Core consumer prices in Tokyo’s Ku-area rose 2.9% year-on-year in July 2025, easing for the second straight month and falling just below market expectations of 3%. Despite the slowdown, inflation remains well above the Bank of Japan’s 2% target, keeping expectations alive for another rate hike later this year. The BOJ will meet next week to decide on monetary policy, with markets anticipating an upward revision to its inflation forecast for the current fiscal year in its quarterly outlook. Still, growth concerns persist. In May, the central bank lowered its GDP projections due to the drag from higher US tariffs, complicating the path for future rate increases. However, a recently signed US-Japan trade deal, which includes a 15% tariff on Japanese exports to the US, has reduced some of the uncertainty surrounding the economic outlook.