Tokyo area inflation the focus today.
Meanwhile, expectations of a Bank of Japan September rate hike are firming up: BOJ’s Himino signals more hikes, flags growing upside inflation risk BOJ policymaker Himino says won’t comment on market expectations on rate hike Where July’s Tokyo print landed Tokyo’s July inflation data set the tone for what’s expected today
Core CPI (ex fresh food) accelerated to 1.90% in July from 1.60% in June, marking a six-month high and beating expectations. The move extended a run of acceleration, with data showing core consumer prices up 1.9% year-on-year in July 2026, following a 1.6% rise the previous month and exceeding expectations of 1.7%, the second straight month of acceleration and the fastest pace since January. Notably, the core-core measure (which the BoJ treats as its preferred underlying inflation gauge) climbed even further, with CPI excluding volatile fresh food and energy costs increasing 2.0% year-on-year, up from 1.9% in June, marking the highest reading in four months.
Even so, headline inflation stayed below the Bank of Japan’s 2% target for a sixth consecutive month, with fuel subsidies and favourable base effects still cushioning some of the pressure from higher raw material costs tied to Middle East tensions. Backdrop shaping expectations for August The broader inflation story since has only reinforced that trajectory. Nationwide July CPI, released a few weeks later, showed core inflation matching forecasts at 1.8% y/y, while the BoJ’s own underlying price gauge ran hotter still, holding above the 2% target.