Rice and processed food boost inflation, Bank of Japan's rate hike expectations rise in October.

According to the Wise Finance APP, despite the slowing growth in prices, the speed of inflation for Japanese consumers, driven by the continued high prices of rice, remains much higher than the 2% target set by the Bank of Japan. This supports market speculation that the Bank of Japan will raise interest rates again this year, particularly after the inflation data was released, leading to a significant increase in market expectations for a rate hike in October. The Japanese Ministry of Internal Affairs reported on Friday that the core consumer price index (core CPI) excluding fresh food rose by 3.1% year-on-year in July, slightly lower than the previous month's 3.3%. Economists' median expectation was for core CPI to increase by 3.0%, with market expectations influenced by the drag from energy prices that surged a year ago.