As the effects of some temporary government policies subsided, Tokyo's core inflation index rose sharply, confirming the Bank of Japan's position of continuing to raise the benchmark interest rate after speeding up the pace of policy normalization. According to data released by Japan's Ministry of Internal Affairs and Communications on Friday, Tokyo's consumer price index excluding fresh food rose 2.7% year on year in September. This figure is higher than economists' median expectations of 2.3%, with an increase of 1.8% last month. Previously, Tokyo's expanded childcare allowance and summer water bill relief policies lowered this inflation target, so the market generally expects this data to rise at an accelerated pace. The sharp rise in CPI confirms the Bank of Japan's concerns that the risk of rising inflation may push the core price trend above the 2% target.

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