Tokyo Core Inflation Tops BOJ's 2% Target at 2.6% in October, Reinforcing Rate-Hike Case

Core consumer inflation in Tokyo exceeded the Bank of Japan's 2% target in October, government data showed Friday, reinforcing expectations for further interest rate increases. The Tokyo core CPI, which includes fuel but excludes fresh food, rose 2.6% year-on-year, matching the median market forecast and slowing from a 2.7% gain in September. An index stripping out volatile fresh food and fuel prices, closely watched by the BOJ as a gauge of trend inflation, rose 2.6% after a 2.9% rise the previous month. Tokyo readings are seen as leading indicators of nationwide price trends. The data preceded the BOJ's policy announcement later Friday. The central bank is expected to hold policy steady but likely to stress its resolve to keep raising rates to prevent an inflation overshoot. The BOJ lifted its policy rate to a 31-year high last month, with the governor signalling a phase focused on preventing underlying inflation from exceeding target.