Analysis: Tokyo inflation cooled more than expected, but it is unlikely to prevent the Bank of Japan from continuing to raise interest rates.

Deep Tide TechFlow News, December 26 — According to Jinshi Data, Tokyo’s inflation cooled more than expected as pressures from food and energy prices eased, but this is unlikely to prevent the Bank of Japan from continuing to raise interest rates. Data released by Japan’s Ministry of Internal Affairs and Communications on Friday show that Tokyo’s consumer price index (CPI) excluding fresh food rose 2.3% year-on-year in December, a significant slowdown from 2.8% the previous month. This is the first slowdown in inflation since August, mainly reflecting a moderation in food price increases and a decline in energy costs. Economists previously expected this indicator to slow to 2.5%. Overall inflation fell from 2.7% in the same period last year to 2.0%; a deeper inflation measure excluding energy prices also slowed to 2.6%. Tokyo’s inflation data is often seen as a leading indicator of nationwide inflation trends. Despite the clear slowdown in overall inflation data, it remains above the Bank of Japan’s 2% target, prompting the central bank to continue on the path of further tightening policies.