Core consumer prices in Tokyo’s central wards rose 2.7% year on year in September 2026, accelerating from August’s 1.8% increase and exceeding the 2.4% expectation. The increase marked the fourth consecutive month of acceleration and the fastest pace since November 2025, pushing inflation above the Bank of Japan’s (BoJ) 2% target for the first time in nine months. The source attributed the broader price pressure to the ongoing Middle East conflict. A CPI measure excluding volatile fresh food and energy costs, which the BoJ views as a better gauge of underlying inflation, rose 3.0% year on year from a downwardly revised 2.0% in August, its highest reading in 13 months. The BoJ raised its policy rate by 25 basis points to 1.25% at its September meeting, the highest level since April 1995, as persistent inflation and higher oil prices continued to shape policy.