🚨Japan core CPI rises as expected in July, but underlying inflation weak 🇯🇵

In July, Japan's core consumer price index (CPI) inflation grew as expected, rising 2.7% annually. However, underlying inflation, which excludes fresh food and energy, dropped to 1.9%, falling below the Bank of Japan's 2% target and marking its weakest level since September 2022. This decline raised doubts about the central bank's ability to continue its hawkish approach, despite recent signs of improved wages and consumer spending. While headline CPI inflation rose to 2.8%, the underlying inflation's weakness suggests that the rise in inflation may be partly driven by higher food and fuel costs, leaving discretionary spending relatively weak.

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