Tokyo's core inflation index has accelerated for the third month in a row, and market expectations for the September rate hike have heated up. This further provides a basis for the Bank of Japan to raise interest rates again. Japan's Ministry of Internal Affairs and Communications announced on Friday that Tokyo's consumer price index excluding fresh food rose 1.8% year on year in August. In July, the figure was 1.7%. The data is in line with economists' median expectations. The Tokyo price data is regarded as a leading indicator of national price trends, but the data in the capital region is sometimes disturbed by local government policies such as tuition exemptions. Core-core CPI, which excludes fresh food and energy, rose 2% year over year, and overall CPI rose 1.9% year over year. Inflation is mainly driven by the cost of durable goods for education and entertainment, as well as medical expenses. Prices are still rising even though Sanae Takaichi introduced a number of measures to reduce the cost of living. This phenomenon will support the Bank of Japan to raise interest rates as early as next month. Overnight index swaps showed that traders' pricing showed a probability of an interest rate hike of about 82% in September. Despite the joint intervention of the US and Japan in July, the yen continued to weaken, the risk of inflation remained high, and market expectations for the central bank's actions next month rose further.

Tokyo's core inflation index has accelerated for the third month in a row, and market expectations for the September rate hike have heated up. This further provides a basis for the Bank of Japan to raise interest rates again. Japan's Ministry of Internal Affairs and Communications announced on Friday that Tokyo's consumer price index excluding fresh food rose 1.8% year on year in August. In July, the figure was 1.7%. The data is in line with economists' median expectations. The Tokyo price data is regarded as a leading indicator of national price trends, but the data in the capital region is sometimes disturbed by local government policies such as tuition exemptions. Core-core CPI, which excludes fresh food and energy, rose 2% year over year, and overall CPI rose 1.9% year over year. Inflation is mainly driven by the cost of durable goods for education and entertainment, as well as medical expenses. Prices are still rising even though Sanae Takaichi introduced a number of measures to reduce the cost of living. This phenomenon will support the Bank of Japan to raise interest rates as early as next month. Overnight index swaps showed that traders' pricing showed a probability of an interest rate hike of about 82% in September. Despite the joint intervention of the US and Japan in July, the yen continued to weaken, the risk of inflation remained high, and market expectations for the central bank's actions next month rose further.