TREE NEWS reports: The Bank of Japan’s gauge of underlying inflation rose 3.2% year-on-year in September, up from 2.6% the prior month and the fastest pace in three years, well above the bank’s 2% target. The reading, published Tuesday, reinforces expectations that the BOJ may raise interest rates again after lifting borrowing costs to 1.25% in September. The BOJ is widely expected to hold policy steady at Friday’s meeting.
BOJ’s core inflation gauge jumps to 3.2% in September, supporting rate-hike case
AI take
The jump in the BOJ's core gauge matters less for Friday's meeting, which is widely expected to leave policy steady, than for the timing of the next move after September's hike to 1.25%. A three-year high in underlying inflation strengthens the case for further tightening, which matters for yen-sensitive carry trades and for crypto and other risk assets that have leaned on cheap yen funding. Whether the BOJ treats this as a durable trend or a one-off is the open question, along with how firmly it signals a hike ahead.
Generated by AI for reference only.
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