Overall inflation - 2.1% year on year versus a forecast of 2.1% and 1.9% in August. The core measure (excluding fresh food) - 2.1% versus 1.7% a month earlier: the Bank of Japan's 2% target has been exceeded for the first time since December 2023. The measure excluding food and energy, which is considered a gauge of sustained price pressure, - 2.4% versus a forecast of 2.3% and 1.9% previously. Month on month - 0% versus expectations of +0.4%.
The main driver is energy. Expensive oil amid the Middle East conflict has reached household bills. An early signal came from the September Tokyo figures (released three weeks ahead of the national ones): the core measure there was 2.7%, and excluding food and energy - 3.0%.
Reaction on the currency market: USD/JPY under pressure, around 156.25 at the start of the Asian session. This is below the monthly range of 157-159 and below the 200-day exponential moving average of around 157.50. The yield on 10-year Japanese government bonds is 2.9%, and on five-year bonds around 2.3%.
Next up is the Bank of Japan meeting on October 29-30. Consensus: the rate will be kept at 1.25% (it was raised in September by a 7-2 vote), and the market is pricing the next move for December. In parallel, preliminary S&P Global business activity indices were released: the composite at 52.3, unchanged, the 19th consecutive month of growth; services 52.0 versus 51.3, manufacturing 53.3 versus 54.1, industrial output 53.1 - a seven-month low, and hiring slowed to a 14-month low.
The picture is mixed: rising prices strengthen the case for further normalization, while weak hiring and demand argue for a slow pace.
Did you trade the yen at 02:30 Moscow time?
One and a half yen down in minutes on overnight data - few catch such a move, and even fewer can trade it by the rules. The window around statistics releases at prop firms is described differently: somewhere a trade on the numbers coming out is standard style, somewhere entering two minutes before the data costs you your account. Plus there are leverage limits on JPY pairs. This filter is worth passing before you pay, not after your account is closed.