The Japanese yen is among the weaker currencies today despite the release of slightly higher core inflation. The USDJPY rises 0.20%.
In July, core inflation in Japan remained well above the Bank of Japan’s (BOJ) target. Consumer prices excluding fresh food rose 3.1% y/y (vs forecast 3.0%, previous 3.3%), while the broader measure excluding both food and energy held at 3.4% y/y. Energy prices fell 0.3% y/y (the first drop since March 2024), but food inflation remained elevated — processed food +8.3%, and rice +90.7% y/y (slightly less than in June). Persistent price pressures, especially on essentials, are weighing on households and fueling speculation that the BOJ may raise rates as early as October.
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Create account Try a demo Download mobile app Download mobile appSome economists even point to the risk of higher inflation in the coming months. According to surveys, 63% of economists expect the BOJ to raise the policy rate from 0.50% to at least 0.75% by the end of 2025, marking a clear rise in expectations compared to previous months.
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