Japan Faces Rising Inflation, Pressuring Bank of Japan to Act

Core inflation hit 3.2% in January, exceeding expectations and raising speculation about further interest rate hikes by the Bank of Japan.

Japan's overall inflation rate climbed to 4% in January, its highest level in two years, driven by soaring food prices and energy costs.
Core inflation, excluding fresh food prices, rose 3.2%, surpassing market forecasts and marking a 19-month high.
The Bank of Japan raised its benchmark interest rate to 0.5% in January and signaled readiness for further hikes if wage growth sustains inflationary pressures.
Tokyo's government has reinstated subsidies to reduce energy costs, slightly slowing inflation in February according to economic forecasts.
Japan's economic growth showed signs of resilience with a 2.8% GDP increase in the fourth quarter, though challenges remain from global trade tensions and weak productivity.