Inflation in the Japanese capital moderated for a fourth consecutive month, with Tokyo’s consumer price index rising 2.6% in August from a year earlier, matching economists’ forecasts and down from 2.9% in July. Core inflation, which excludes fresh food, slowed to 2.5%, and the so-called core-core gauge that strips out both fresh food and energy eased to 3.0%. The readings, the lowest since March, remain above the Bank of Japan’s 2% goal but confirm a gradual cooling in price pressures. Labour-market data painted a still-tight picture. Japan’s nationwide unemployment rate fell to 2.3% in July from 2.5% the previous month, the lowest level since late 2019. The job-to-applicant ratio held at 1.22, indicating 122 vacancies for every 100 job seekers and suggesting firms continue to face hiring constraints despite slower inflation. Other indicators were less encouraging. Industrial production dropped 1.6% in July from June and was 0.9% lower than a year earlier, while retail sales fell 1.6% year-on-year and around 1% month-on-month, both missing consensus estimates. The combination of easing inflation, resilient employment and weakening output underscores the mixed backdrop confronting the Bank of Japan as it weighs the timetable for dialing back its ultra-easy monetary stance.