Surprising Acceleration of Inflation in Tokyo Puts BOJ in Spotlight

Core consumer inflation in Tokyo unexpectedly accelerated in October, indicating broadening price pressures and raising expectations of a near-term end to ultra-low interest rates. The data suggests that the Bank of Japan (BOJ) may revise up its inflation forecasts at the upcoming policy meeting. The Tokyo core CPI rose 2.7% year-on-year, exceeding market forecasts, while the "core core" index, which excludes fresh food and fuel prices, increased by 3.8%. Services prices also rose, indicating potential inflationary pressure beyond goods. The BOJ, which has maintained ultra-loose policy, is facing pressure to adjust its bond yield control due to rising global interest rates.