Tokyo October CPI showed persistent inflation ahead of the Bank of Japan
decision. Core CPI excluding fresh food rose 2.6% YoY, down slightly from
September's 2.7%; headline CPI was 2.8% YoY. Core-core CPI (ex fresh food and
energy) was 2.6%, underscoring underlying price pressure above the BOJ's 2%
target. Government subsidies that lowered summer electricity and city gas bills
weighed on October inflation but are likely to fade. Energy contributed to the
rise: electricity +1.7% and city gas +4.9%, both reversing prior declines. Data
were released hours before the BOJ decision; markets expect policymakers to
leave rates unchanged today, and the print is unlikely to rule out hikes in
coming months.
