Home / Business and Economy / Japan Inflation Surges: BOJ Rate Hike Looming?
Japan Inflation Surges: BOJ Rate Hike Looming?
21 Nov
Summary
- Core inflation in Japan reached 3% in October, aligning with forecasts.
- Headline inflation also hit 3%, persisting above the BOJ's target for 43 months.
- Japan's GDP contracted by 0.4% in the July-September quarter.
Japan's core inflation climbed to 3% in October, its fastest pace since July and in line with market expectations. This data strengthens the argument for the Bank of Japan to consider raising interest rates. The headline inflation rate also stood at 3%, marking the 43rd consecutive month above the BOJ's 2% target, signaling persistent price pressures.
Further complicating the economic picture, the "core-core" inflation rate, excluding fresh food and energy, nudged up to 3.1%. This comes as Governor Kazuo Ueda reportedly met with Prime Minister Sanae Takaichi to discuss monetary policy. Ueda reiterated the BOJ's gradual approach to rate hikes aimed at achieving the 2% inflation target and sustainable growth.
The central bank faces a challenging scenario with inflation above target and weakening economic growth, partly due to U.S. tariffs. Japan's Gross Domestic Product contracted by 0.4% sequentially in the July-September quarter, the first decline in six quarters, highlighting the economic pressures.
