Core consumer prices in Tokyo’s Ku-area rose 3.1% year-on-year in June 2025, easing from a 3.6% increase in May and falling short of market expectations of 3.3%. This marks the first slowdown in core inflation since February, though the rate remains well above the Bank of Japan’s 2% target, sustaining expectations for further interest rate hikes. BOJ Governor Kazuo Ueda recently signaled that the central bank may continue raising rates if sustained wage growth supports consumer spending and enables firms to pass on higher costs—conditions seen as critical to anchoring inflation around the 2% goal. Still, the BOJ’s latest Summary of Opinions struck a more cautious tone, with policymakers stressing the importance of maintaining an accommodative stance amid ongoing global trade tensions and geopolitical uncertainties.