MNI BRIEF: Japan Oct Trimmed Mean Rises 10bp To 2.2%

Japan’s trimmed mean measure of underlying inflation rose 2.2% y/y in October, up from 2.1% in September, remaining above the Bank of Japan’s 2% target for a 10th consecutive month, BOJ data showed Tuesday. 

The increase signals continued pass-through of cost pressures stemming from elevated labour costs.

The release follows Friday’s CPI report showing core inflation at 3.0% y/y in October, accelerating from 2.9% in September and exceeding the 2% target for the 43rd straight month. The mode of the inflation distribution rose to 1.5% from 1.4%.

Despite these readings, the BOJ has maintained that underlying CPI is moving within a 1.5%–2.0% range, still slightly below its target, and is likely to remain subdued due to slowing economic momentum. Governor Kazuo Ueda has reiterated that underlying inflation is “still a little below 2%” but gradually approaching the goal.

The bank continues to project that underlying inflation will reach a level broadly consistent with its price stability target in the second half of the forecast horizon through March 2028.