Core consumer prices in Tokyo increased by 2.2% year-on-year in November, surpassing the Bank of Japan's (BOJ) target of 2%. This rise has intensified market expectations for a potential interest rate hike.
The Tokyo core consumer price index (CPI), which excludes fresh food costs, exceeded market forecasts of a 2.1% increase and marked an acceleration from a 1.8% rise in October. Another index, which omits both fresh food and fuel costs, rose by 1.9% in November, following a 1.8% increase the previous month.
The BOJ, having ended negative interest rates in March and raised the short-term policy rate to 0.25% in July, is closely monitoring these inflation figures. BOJ Governor Kazuo Ueda has indicated that further rate increases are possible if inflation continues to align with the 2% target. A majority of economists surveyed expect the BOJ to consider another rate increase during its next policy meeting on December 18-19.