Faster Tokyo inflation supports near-term BOJ rate hike case

Tokyo’s core CPI, excluding fresh food, rose 1.8% year on year in August, up slightly from 1.7% in July. | BLOOMBERG

Aug 28, 2026

Tokyo’s key inflation gauge accelerated for a third month even as the government took steps to reduce energy costs, bolstering the case for another Bank of Japan interest-rate increase as market expectations mount for a move in September.

The consumer price index (CPI) excluding fresh food rose 1.8% in August from a year earlier, picking up a tad after rising 1.7% in July, the internal affairs ministry said Friday. The reading matched the median estimate in a Bloomberg survey.

The Tokyo data is considered a leading indicator for national price trends, although the figures for the capital have on occasion been distorted by local government steps including cuts to school fees. The index that omits both fresh food and energy climbed 2%, while the overall CPI advanced 1.9%.

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