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2025.08.2123:58:58UTC+00Japan Core Inflation Tops Forecasts in July

In July 2025, Japan's core consumer price index (CPI), which excludes fresh food but includes energy, increased by 3.1% compared to the same period last year. This represents a slight decrease from June's 3.3% rise, but it surpassed market predictions of 3%. The core inflation rate has consistently remained above the Bank of Japan's 2% target, bolstering expectations for another interest rate hike within the year. Persisting price pressures and stagnant wage growth have intensified calls for policy tightening. In its July meeting, the Bank of Japan raised its inflation outlook and suggested the possibility of a rate hike by the end of the year. Nevertheless, Governor Kazuo Ueda expressed caution, emphasizing that "underlying inflation" has not yet consistently aligned with the 2% objective.

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