MNI BRIEF: BOJ: Japan Sept Trimmed Mean Rises 2.1%; Aug 2.0%

Japan’s trimmed-mean measure of underlying inflation rose 2.1% y/y in September, up from 2.0% in August, marking the eighth straight month above 2%, data released by the Bank of Japan showed on Tuesday.

This suggests that cost pass-throughs — such as the impact of high rice prices and elevated labour costs — continued, though they appear to be slowing.

The trimmed mean follows data released on Friday showing Japan’s annual core‐consumer inflation rate rose 2.9% y/y in September (up from 2.7% in August) and has stayed above the 2% target for the 42nd consecutive month.

Tuesday’s figures also showed the “mode” — the inflation rate with the highest density in the distribution — stood at 1.4% in September, up from 1.1% in August.

The BOJ has repeatedly argued that underlying CPI inflation is moving in a range of 1.5%-2.0%, still below its 2% price stability target, and is likely to remain sluggish owing to an economic slowdown. (See MNI POLICY: BOJ Hikes To Weather Sluggish Underlying CPI)

Governor Kazuo Ueda noted that inflation is still a little below 2% but is in the process of approaching the target. The bank maintains the view that underlying CPI inflation is likely to reach a level “generally consistent” with the price stability target in the second half of the projection period to March 2028.