Japan Core Inflation Rate

Japan's core consumer price index, which excludes fresh food but includes fuel costs, increased by 3% year-on-year in December 2024, marking the highest level since August 2023. December’s figure also accelerated from a 2.7% rise in November and matched market expectations. The latest reading came ahead of a highly-anticipated monetary policy decision from the Bank of Japan, where it is expected to raise interest rates again and revise its inflation forecasts higher. Core inflation in Japan has consistently stayed at or above the central bank’s 2% target for nearly three years now, supporting the board’s plan to normalize monetary settings. BOJ Governor Ueda recently stated that the central bank would consider rate hikes if the economy remains strong, while Deputy Governor Himino noted that it would be unusual for real interest rates to stay negative once Japan moves past deflationary pressures.