Tokyo Inflation Cools to 2.9%, Still Above BOJ Target

Inflation in the Japanese capital slowed for a second consecutive month, with Tokyo’s consumer price index rising 2.9% in July from a year earlier, below the 3.0% consensus forecast and down from 3.1% in June. Core CPI, which strips out volatile fresh-food costs and is seen as a leading indicator for nationwide inflation, also increased 2.9%, missing expectations by 0.1 percentage point. The narrower core-core gauge that excludes both fresh food and energy rose 3.1%, matching projections and remaining unchanged from the previous month. The data suggest price pressures are easing modestly but remain above the Bank of Japan’s 2% target, keeping policymakers on watch as they assess the durability of inflation before adjusting ultra-loose monetary settings. Separate figures showed services producer prices climbed 3.2% in June, indicating underlying cost pressures persist in parts of the economy.