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Tokyo Core Inflation Holds 2.6% Above BOJ Target

By Drooid · Oct 30, 2026 · How we work

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Summary

Tokyo core consumer prices rose 2.6% in October, staying above the Bank of Japan’s 2% target.
The increase slowed from 2.7% in September, marking the first five-month deceleration.
The Bank of Japan raised its policy rate to 1.25% in September, the highest since April 1995.
Higher import costs from a weak yen and Middle East energy tensions added to inflation pressure.

Summary

Major Japanese banks posted profit gains as domestic interest rates rose.
Export-oriented firms could see weaker earnings if a firmer yen follows a hawkish BOJ tone.
Government subsidies for electricity and gas end in December, potentially lifting inflation.
Prime Minister Sanae Takaichi proposes temporary consumption-tax cuts and income-linked benefits for households.

History

After adopting a zero-interest-rate policy in 1999, the Bank of Japan ended that stance in June 2006 by raising its short-term rate to 0.25%. The move coincided with Prime Minister Shinzo Abe’s fiscal stimulus and a ¥120 billion yen-intervention by Mitsubishi UFJ and the Ministry of Finance, echoing earlier efforts to combat deflation pressures.

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After adopting a zero-interest-rate policy in 1999, the Bank of Japan ended that stance in June 2006 by raising its short-term rate to 0.25%. The move coincided with Prime Minister Shinzo Abe’s fiscal stimulus and a ¥120 billion yen-intervention by Mitsubishi UFJ and the Ministry of Finance, echoing earlier efforts to combat deflation pressures.

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