Japan’s October CPI inflation will be released next week. We expect headline inflation to accelerate to 3.3% year-on-year in October (up from 3.0% in September). Fresh food and energy prices will be the main drivers, but prices for other services are also expected to rise, reflecting the upward pressure built on input prices.
Core inflation (excluding fresh food and energy) will likely remain above the 4.0% level, likely shifting the Bank of Japan’s policy stance toward neutrality against the ultra-easing bias.
