Tokyo Inflation Cools More Than Expected as BOJ Watches

Tokyo’s inflation cooled more than expected, as pressures from food and energy prices faded, but is unlikely to deter the Bank of Japan from further rate hikes.

Consumer prices excluding fresh food in the capital rose 2.3% in December from a year earlier, slowing sharply from 2.8% in the previous month, according to the Ministry of Internal Affairs and Communications Friday. The deceleration was the first time since August, and largely reflected softer food price gains and falls in energy costs. Economists had expected the reading to slow to 2.5%.