Japan's Core Inflation Slows to 2-Year Low, Complicates BOJ Rate-Hike Timing

Channel News Asia ^ | 20 Feb 2026

[nickcarraway]

Japan's annual core consumer inflation hit a two-year low to match the central bank's 2 per cent target in January, data showed on Friday, suggesting weakening price pressure that could complicate its decision on how soon to raise interest rates.

A separate index seen as a better indicator of underlying inflation also slowed but remained well above the Bank of Japan's target, suggesting that solid wage gains will keep the central bank on course to push up still-low borrowing costs.

The data adds to recent mixed signs in the economy which barely grew in the final quarter of last year, but saw exports jump and manufacturers' confidence improve so far this year.

"With price pressures showing signs of softening, the Bank of Japan won't be in a rush to resume its hiking cycle. However, we still believe conditions will be in place for the Bank to raise rates by the middle of the year," said Abhijit Surya, senior APAC economist at Capital Economics.

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TOPICS: Business/Economy; Foreign Affairs; Japan; News/Current Events
KEYWORDS: centralbank; inflation; japan

[Mr. Blond]

These Japanese bankers keep screwing with our economy.