Japan's core Consumer Price Index rose 2.1% in the year to September, its first reading above the Bank of Japan's 2% target since December 2025. The Bank of Japan held its policy rate at 1.25% on 30 October.
Core inflation, which strips out fresh food, had spent the eight months from January to August below the target. In September it jumped from 1.7% to 2.1%.
Is Japanese inflation above the Bank of Japan's target? Core inflation reached 2.1% in September, the first month above the 2% target since December 2025. The measure excluding fresh food and energy reached 2.4%.
Headline inflation was 2.1%, up from 1.9% in August.
Food added 0.77 points of the 2.1%. Education subtracted 0.12 points.
On 30 October the board held its policy rate at 1.25% by 8 votes to 1. Takata Hajime voted for 1.5%.
What the release showed
The Statistics Bureau of Japan put headline inflation at 2.1% for the year to September, against 1.9% in August. On a seasonally adjusted basis the index rose 0.4% over the month.
Core inflation, the measure the Bank of Japan watches most closely, also reached 2.1%. It had not been above 2% since December 2025, when it stood at 2.4%.
The measure that excludes both fresh food and energy rose from 1.9% to 2.4%. That figure matched its March reading. It has been higher within the past year, reaching 2.5% in January.
The measure excluding energy ran above the other two for most of the past year, because falling energy prices were holding the headline and core readings down.
What pushed the rate up and what held it back
Food contributed 0.77 points of the 2.1%, the largest single share. Transport and communication added 0.36 points, as did culture and recreation.
Only one group subtracted. Education came in at -3.8%, taking 0.12 points off the headline rate, driven by private high school tuition falling 73.2%.
Rice was the other large drag. Grain prices fell 5.0%, with non-Koshihikari rice down 21.1% on the year, which alone subtracted 0.15 points.
The push came from elsewhere. Motoring costs rose 2.1% and added 0.20 points, with voluntary car insurance up 5.9%. Recreation services rose 3.0%, with hotel charges up 4.6%. Household consumables rose 12.4%, with toilet paper up 17.8%.
Two shifts explain most of the acceleration from August. Fuel, light and water turned positive, from -0.3% to 0.8%, as the government's utility subsidies expired. Fresh food slowed sharply at the same time, from 6.0% to 2.1%, which pulled in the other direction.
What the Bank of Japan decided
The Bank of Japan held its policy rate at 1.25% on 30 October. The vote was 8 to 1.
Takata Hajime voted for a rate of 1.5%. He judged that the economy had entered a new phase and that the bank needed to move its policy rate toward neutral faster. He said underlying inflation had reached the price stability target.
Asada Toichiro and Sato Ayano voted against the September rise. This time they voted with the majority. The September rise to 1.25%, the highest rate since 1995, passed by 7 votes to 2.
The board also decided to raise its sales of exchange-traded funds from about 330 billion yen a year to about 860 billion yen, starting in January 2027. That vote was unanimous.
What to watch next
Tokyo's October CPI follows on 31 October. Tokyo data leads the national series by about three weeks, so it gives the first read on whether the utility subsidy effect is still building.
National October figures are due on 21 November. The next policy meeting after this one runs from 17 to 18 December.
Common questions about Japan's inflation rate
What is Japan's current inflation rate?
Japan's headline Consumer Price Index rose 2.1% in the year to September 2026, reported by the Statistics Bureau of Japan on 23 October. Core inflation, which excludes fresh food, was also 2.1%. The measure excluding fresh food and energy was 2.4%.
Is Japanese inflation above the Bank of Japan's target?
Core inflation reached 2.1% in September, its first month above the 2% target since December 2025. It had been below the target in all eight months from January to August 2026. One month above a target is not the same as meeting it on a sustained basis.
What is driving Japan's inflation?
Food contributed 0.77 points of September's 2.1% headline rate, the largest single share. Motoring costs, recreation services and household goods added most of the rest. Utility prices turned positive as government subsidies expired. Education subtracted 0.12 points.
When does the Bank of Japan meet next?
The next meeting runs from 17 to 18 December 2026. The board held the policy rate at 1.25% on 30 October by 8 votes to 1. It had raised the rate to 1.25% on 18 September, the highest since 1995.
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