Japan's core CPI growth rate slowed in September, and the Bank of Japan is expected to stand still at the end of this month

The Zhitong Finance App learned that Japan's main inflation indicators slowed for the first time in five months in September. According to data released by Japan's Ministry of Home Affairs on Friday, Japan's core CPI in September, excluding fresh food, rose 2.4% year on year, lower than the previous value of 2.8%, but slightly higher than market expectations of 2.3%; Japan's national CPI rose 2.5% year on year in September, lower than the previous value of 3%.

The slowdown in this indicator of inflation in Japan is due in large part to government utility subsidies. Therefore, if there are no other signs that the inflation trend is weakening, this may have a limited impact on the Bank of Japan's path policy.

Meanwhile, the inflation index, which excludes energy costs and fresh food prices, rose 2.1% year on year, higher than the previous value of 2.0%; service prices, which are regarded by the Bank of Japan as a key indicator for testing price trends, rose 1.3% year on year in September, lower than the previous value of 1.4%.

The Bank of Japan will announce the latest interest rate decision on October 31. The market currently generally anticipates that the Bank of Japan will keep the benchmark interest rate unchanged at 0.25% at that time. After Japanese Prime Minister Ishiwari Shigeru made remarks earlier this month that “the Japanese economy is not ready to accept another interest rate hike by the Bank of Japan,” some market participants postponed expectations for the Bank of Japan's next rate hike until January next year.

Bank of Japan member Adachi Seiji said on Thursday that in the process of gradually raising interest rates, it is necessary to be careful that while maintaining a relaxed financial environment, interest rates should be raised as slowly as possible until the trend reaches 2%. Adachi Seiji stressed that it is necessary to take a gradual approach to raise the benchmark interest rate. His remarks may reinforce the market's view that the Bank of Japan will stand still when it meets this month to formulate policies.

The Bank of Japan has always maintained its position that if the development of inflation is in line with its own predictions, it will further reduce monetary easing and raise interest rates further. Economist Taro Kimura said, “The Bank of Japan is watching the performance of the US economy before further interest rate hikes. We believe that the Bank of Japan will be able to confirm a soft landing for the US economy by the time the policy meeting is held in January next year.”