Tokyo Inflation Slows on Subsidies as BOJ Remains on Hike Path

Inflation in Tokyo sharply eased, led by government utility subsidies, while keeping policymakers on the path toward further interest-rate hikes as it stayed well above the Bank of Japan’s target.

Consumer prices excluding fresh food rose 2.5% in the capital in August from a year earlier, slowing from a 2.9% clip in the previous month largely due to a drop in water, electricity and gas prices, the Ministry of Internal Affairs and Communications said on Friday. The slowest pace of gains since March matched economists’ forecast.