Tokyo Inflation Cools More Than Expected, But Unlikely to Halt BOJ Rate Hikes

BlockBeats News, December 26: Tokyo's inflation cooled more than expected, as the pressure from food and energy prices eased, but this is unlikely to deter the Bank of Japan from continuing to hike interest rates. Data released by Japan's Ministry of Internal Affairs and Communications on Friday showed that Tokyo's Consumer Price Index (CPI) excluding fresh food rose by 2.3% year-on-year in December, a significant slowdown from the previous month's 2.8%. This is the first time inflation has slowed since August, mainly reflecting a moderation in food price increases and a decline in energy costs. Economists had expected the indicator to slow to 2.5%. The overall inflation index fell from 2.7% in the same period last year to 2.0%; and the core inflation index, excluding energy prices, also slowed to 2.6%. Tokyo's inflation data is often seen as a leading indicator of national inflation trends. Despite the clear slowdown in overall inflation data, it remains above the Bank of Japan's 2% target, prompting the central bank to continue on the path of further tightening its policy.