Japan’s Inflation Hits 8-Year High as BOJ May Keep Ultra-low Rate

Japan’s inflation accelerated to 3.0% in September, the highest in eight years, amid rising import costs and easy monetary policy by the Bank of Japan.

Core consumer price index (CPI), which excludes fuel and food costs, was in line with the consensus at 3%, but higher than the previous month of 2.8%.

The inflation data underscores the difficulties that the Bank of Japan tries to underpin a weak economy by maintaining ultra-low interest rates amid a global parade of rate hikes, especially the U.S. Federal Serve, resulting in a slide in Japanese yen.

Takeshi Minami, chief economist at Norinchukin Research Institute said that Haruhiko Kuroda, governor of the central bank, may maintain the policy rate for the rest of his term, which will end in April.


Yesterday, the Japanese yen fell below 150 per dollar, a key psychological milestone, and reached levels not seen since August 1990.

Earlier, the central bank announced that it would conduct emergency bond-buying operations, committing to purchase approximately $667 million in government debt in an effort to stabilize bond prices.