Japan CPI 2.9%; Political Pressure Grows

Japan’s consumer price inflation accelerated to 2.9% year‑on‑year in September 2025, up from 2.7% in August, with monthly CPI rising 0.1%. Core measures excluding fresh food and/or energy remain sticky in the high 2s–3.0%, keeping inflation above the Bank of Japan’s 2% target. That persistence has left markets still pricing in an eventual BOJ rate hike even as Governor Kazuo Ueda urges more data scrutiny. The inflation pickup presents a political complication for new Prime Minister Sanae Takaichi, whose calls for expansive fiscal stimulus and looser policy could complicate the BOJ’s path to tightening. In the United States, the CPI release was delayed by a government shutdown that prompted the Bureau of Labor Statistics to recall furloughed staff; estimates put U.S. headline inflation at about 3.1% year‑on‑year with core around 3.1%, driven by food, tariff‑affected goods and sticky services.