Japan Core Inflation Holds at Three Percent, Reinforcing Central Bank's Shift Toward Higher Rates

Tokyo, Friday, 19 December 2025.
Japan’s core consumer prices rose 3.0% in November 2025, matching October’s pace and aligning perfectly with market forecasts. This marks the 44th consecutive month that inflation has exceeded the Bank of Japan’s 2% target, driven significantly by a 4.9% jump in electricity costs following the end of government subsidies. While the broader rise in food prices is showing signs of deceleration, specific commodities remain volatile, with coffee bean prices surging 51.6% due to weather conditions in Brazil. This sustained inflationary pressure validates the Bank of Japan’s decision today, December 19, to raise the policy interest rate to 0.75%, signaling a decisive move away from decades of ultra-loose monetary policy as the economy adjusts to a new environment of persistent rising costs.