Tokyo Inflation Eases More Than Expected, Bank of Japan Likely to Maintain Rate Hikes
According to ChainCatcher, Tokyo's inflation rate has eased more than anticipated as pressures from food and energy prices diminish. However, this is unlikely to deter the Bank of Japan from continuing its interest rate hikes. Data released by Japan's Ministry of Internal Affairs on Friday shows that the consumer price index (CPI) for Tokyo, excluding fresh food, rose by 2.3% year-on-year in December, a noticeable slowdown from the previous month's 2.8%.
This marks the first slowdown in inflation since August, primarily reflecting a moderation in food price increases and a decline in energy costs. Economists had previously forecasted the index to slow to 2.5%. The overall inflation indicator decreased from 2.7% in the previous year to 2.0%, while the deeper inflation measure excluding energy prices also slowed to 2.6%. Tokyo's inflation data is often seen as a leading indicator for nationwide inflation trends.
Despite the significant slowdown in overall inflation data, it remains above the Bank of Japan's 2% target, keeping the central bank on track for further policy tightening.
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