Japan Core Inflation Hits 2.1% in September, Highest This Year

Japan’s core consumer inflation accelerated to 2.1% in September, its highest reading this year, putting price growth above the Bank of Japan’s target and potentially strengthening the case for another rate increase.

The measure, which excludes fresh food, rose from 1.7% in August and matched economists’ forecast. Headline inflation was also 2.1%. A separate gauge that excludes fresh food and energy reached 2.4%.

Price increases for durable goods and public utility services helped drive inflation higher. Services inflation edged up to 1.5% from 1.2% in August. Rice prices moved in the opposite direction, falling 20.6% from a year earlier.

The Bank of Japan raised its policy rate by 25 basis points in September to 1.25%, a three-decade high. The September inflation reading adds to the case for another increase this year. The central bank’s Oct. 30 meeting is its next policy checkpoint, following earlier coverage of its inflation outlook.