Japan's Ministry of Internal Affairs and Communications said Tokyo core CPI
excluding fresh food rose 2.7% YoY in September, up from 1.8% in August and
above economists' 2.3% forecast. The acceleration reflects fading effects of
temporary government measures—expanded childcare subsidies and waived summer
water bills—that had earlier depressed readings. Food-processing costs were the
main driver (+3.6% YoY); water charges jumped about 66% YoY and accommodation
swung from -1.4% to +4.6%. Major food and beverage firms raised prices on 4,965
items last month, more than double a year earlier. The stronger Tokyo CPI
bolsters Bank of Japan concerns that underlying inflation could exceed its 2%
target and supports further tightening; the BOJ has hiked rates twice in three
months, the shortest interval since 1990, and is weighing timing for the next
increase.
