[Nationwide CPI] Key points for August: Core CPI expected to remain flat at +1.8%, with inflation data due on the morning of the Bank of Japan meeting (released at 8:30 on 18 September 2026)

The market expects the nationwide CPI for August, released by the Ministry of Internal Affairs and Communications, to show headline inflation of 2.0% year on year, core inflation of 1.8% and core-core inflation of 2.0%, compared with the previous month. July's figures were 1.9% for headline inflation, 1.8% for core inflation and 1.9% for core-core inflation, with all three measures accelerating slightly from the previous month. Energy costs and food price increases are expected to provide upward pressure, while core inflation is likely to remain below the lower end of the Bank of Japan's target. The Tokyo 23-ward CPI leading indicator for August showed core inflation at 1.8%, headline inflation at 1.9% and core-core inflation at 2.0%, confirming a tendency for inflation to remain elevated.

As the market awaits the Bank of Japan meeting's results, investors are focused on the possibility that the CPI data could influence judgments on the pace of interest-rate increases. The Tokyo 23-ward CPI leading indicator is expected to show core inflation holding steady, despite downward pressure from the resumption of energy subsidies, as prices for dining out and food products continue to rise. The Corporate Goods Price Index is still showing growth in the 7% range, and the divergence between upstream prices and consumer prices has been cited as a risk factor.

The CPI result will be treated as an input into the Bank of Japan's decision-making and could influence the assessment of the timing of the next rate hike, as indicated at Governor Ueda's (植田) press conference. The prevailing market view is that the Bank of Japan will raise its policy rate from 1.00% to 1.25%, but the focus will be on whether a recovery in core-core inflation toward around 2% provides grounds for accelerating the pace of increases.