Tokyo Inflation Accelerates to Highest Level in a Year, Boosting Rate Hike Prospects

Core consumer prices in Japan's capital rose 2.5% in January, reinforcing the Bank of Japan's outlook and signaling persistent cost pressures.

Tokyo's core consumer price index (CPI), excluding fresh food, increased by 2.5% in January, the fastest pace since February 2024.
The overall Tokyo CPI, including fresh food, rose 3.4%, driven by higher costs for vegetables, rice, and other goods.
The Bank of Japan recently raised interest rates to 0.5%, the highest level since the 2008 financial crisis, and has signaled potential further hikes this year.
Rising raw material costs and a weak yen continue to push up import prices, with analysts predicting nationwide inflation could approach 3% by May.
While wage increases are expected to support consumption, uncertainty remains over whether they will keep pace with rising living costs.