Consumer inflation in Tokyo for October is projected to have fallen short of the central bank’s price target for the first time in five months, according to a Reuters poll conducted on Friday. The median forecast from 18 economists indicates that the core consumer price index (CPI) in Tokyo likely rose by 1.7% year-on-year. This figure follows a 2.0% increase in September and represents the first instance of missing the Bank of Japan’s (BOJ) 2% target since the 1.9% growth recorded in May.
Takeshi Minami, chief economist at Norinchukin Research Institute, noted, “The momentum of food price hikes is weakening, and consumer spending recovery remains sluggish despite significant wage growth.”
Earlier data released on Friday revealed that Japan’s nationwide core CPI, which excludes fresh food but includes energy items, slowed to a 2.4% increase in September.
The government is scheduled to release the October Tokyo CPI data on October 25 at 8:30 a.m. Japan time (October 24 at 11:30 p.m. GMT). This data will be crucial for the BOJ as it prepares its quarterly economic forecasts during its upcoming policy meeting on October 30-31.
A Reuters poll indicates that the BOJ is expected to maintain its interest rates at the current level during its October meeting. A narrow majority of economists predict that the BOJ will retain the current rate of 0.25% through the end of December, while nearly 90% expect an increase to 0.5% by the end of March.
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