AI Data Insight
The Tokyo area CPI index for August 2026 reported at 102.4, showing a significant superficial pullback from the previous value of 113.2, primarily affected by the base year switch. Actual core inflation increased by 1.8% year-over-year, in line with market consensus, and expanded at an accelerated pace for the third consecutive month. Given the stickiness of service prices and hawkish remarks from senior BOJ officials, the market is highly pricing in the possibility of a further rate hike in September.