Japan’s inflation rate fell in October, Bank of Japan still considering raising interest rates | Wilnesh News

Japan’s overall inflation rate fell to 2.3% in October, the lowest level since January, down from 2.5% in September.

Core inflation, which excludes fresh food prices, was 2.3%, down from 2.4% in September. However, the figure was slightly higher than the 2.2% expected by economists polled by Reuters.

The Bank of Japan has long stated that its goal is to “A virtuous cycle between wages and prices.Therefore, weak inflation data may mean that the central bank still needs to maintain an accommodative monetary policy stance.

Another measure of inflation, known as “core-to-core” inflation, which excludes fresh food and energy prices, rose to 2.3%, up from 2.1% in September. The Bank of Japan also tracks this indicator.

LSEG data shows that as of November 22, 55% of economists surveyed by Reuters expected the Bank of Japan to raise interest rates by 25 basis points at the December meeting, which would bring the benchmark policy rate to 0.5%.

On November 18, Bank of Japan Governor Kazuo Ueda explain According to Reuters, the economy is headed for sustained wage-driven inflation and it warned against keeping borrowing costs too low.

The Bank of Japan also stated in its latest report that Summary of comments If prices and the Japanese economy develop as expected, the policy rate could reach 1% as soon as the second half of fiscal 2025.

Notably, the “core-to-core” index rose despite weak core inflation, Lorraine Tan, director of Asian equity research at Morningstar, told CNBC after the CPI was released.

The firm still expects the Bank of Japan to continue “gradually escalating” Japan’s interest rates, Tan said, adding that the BOJ will want to use monetary policy to keep the yen “stable.”