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13h ago

Tokyo Inflation Cools in January, Easing Pressure on the BOJ

Temporary subsidies and base effects drove much of the slowdown.

A customer looks around seafood at a shop in Tokyo, Japan November 19, 2025. REUTERS/Kim Kyung-Hoon
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Overview

  • Headline consumer prices in Tokyo rose 1.5% year over year in January, down from 2.0% in December.
  • Core inflation excluding fresh food increased 2.0%, easing from 2.3% and coming in below the 2.2% market forecast.
  • The BOJ-watched gauge excluding both food and fuel rose 2.4%, down from 2.6%, pointing to softer underlying momentum.
  • Labour conditions stayed tight with unemployment at 2.6% in December and the jobs-to-applicants ratio edging up to 1.19.
  • Following the December rate hike to 0.75%, the readings support a cautious, data‑dependent stance as markets await national CPI in about three weeks and assess risks from a weak yen and wage trends.