Japan Core Inflation Eases, Below Forecasts

2026-09-17 23:37 By Chusnul Chotimah 1 min. read

Japan’s core consumer price index, which excludes fresh food but includes energy, increased 1.7% yoy in August 2026, after a 1.8% rise in July.

The latest reading slowed from the highest rate in six months, touched a month earlier, and was below the market forecast of 1.8%.

Still, the latest reading remained below the Bank of Japan’s 2% target for an eighth straight month, as government fuel subsidies helped offset price pressures from higher oil costs linked to the Middle East conflict.

Meanwhile, the index excluding the effects of volatile fresh food and fuel, which the Bank of Japan closely watches as a better gauge of demand-driven price movements, stood at 1.9% year-on-year in August, remaining at its fastest increase in three months.

The BoJ left interest rates at 1.0% at its July meeting, keeping them at their highest level since September 1995, after a 25-bps hike in June.

The release came hours before the BoJ’s meeting today, with the market expecting rates to rise to 1.25%.



News Stream
Japan Core Inflation Eases, Below Forecasts
Japan’s core consumer price index, which excludes fresh food but includes energy, increased 1.7% yoy in August 2026, after a 1.8% rise in July. The latest reading slowed from the highest rate in six months, touched a month earlier, and was below the market forecast of 1.8%. Still, the latest reading remained below the Bank of Japan’s 2% target for an eighth straight month, as government fuel subsidies helped offset price pressures from higher oil costs linked to the Middle East conflict. Meanwhile, the index excluding the effects of volatile fresh food and fuel, which the Bank of Japan closely watches as a better gauge of demand-driven price movements, stood at 1.9% year-on-year in August, remaining at its fastest increase in three months. The BoJ left interest rates at 1.0% at its July meeting, keeping them at their highest level since September 1995, after a 25-bps hike in June. The release came hours before the BoJ’s meeting today, with the market expecting rates to rise to 1.25%.
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