Japan’s core consumer price index, which excludes fresh food but includes energy, increased 2.7% year-on-year in August 2025, easing for the third month in a row to its lowest level since November 2024. Still, core inflation has held above the Bank of Japan’s 2% target, sustaining expectations for another rate hike later this year. The central bank is widely expected to leave policy unchanged at its September meeting as the economy faces domestic and external headwinds, particularly from US tariffs. Even so, markets anticipate a possible 25 basis point hike in October amid signs of economic resilience. BOJ Governor Kazuo Ueda has continued to strike a cautious note, emphasizing that “underlying inflation” has yet to show a stable alignment with the 2% target.

Japan Core Inflation Slows for 3rd Straight Month

Food prices in Japan increased by 7.2% year-on-year in August 2025, easing from a 7.6% gain in the previous month, which marked the sharpest increase in five months.

Japan Food Prices Rise at Slower Pace

Japan's annual inflation rate fell to 2.7% in August 2025 from 3.1% in the previous month, marking the lowest reading since October 2024. Core inflation also came in at 2.7%, matching consensus and reaching a 9-month low. Monthly, the CPI edged up 0.1%, holding steady for the third straight month.

Japan Inflation Hits 10-Month Low

The GfK Consumer Confidence Index for the UK slipped to -19 in September 2025 from -17 in August, undershooting expectations of -18 as worries over looming tax hikes weighed on sentiment. All five measures of confidence deteriorated, while a separate indicator of savings intentions posted a sharp decline. Economic outlook sentiment also stayed subdued at -32. GfK cautioned that fears of tax increases in Finance Minister Rachel Reeves’ November budget could further erode confidence. Reeves is due to raise taxes on November 26 to keep budget goals on track, following last year’s rise in employer social security contributions. Meanwhile, Neil Bellamy, GfK’s consumer insights director, noted that the Bank of England’s August rate cut failed to lift consumer sentiment or distract from ongoing cost pressures.

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Japan Core Inflation Slows for 3rd Straight Month

Japan Food Prices Rise at Slower Pace

Japan Inflation Hits 10-Month Low

UK Consumer Confidence Weakens in September