Japan’s core consumer price index, which excludes fresh food but includes energy, rose 3.3% year-on-year in June 2025, matching market forecasts but remaining above the central bank's 2% target. This marked a slowdown for the first time since February, following a 3.7% increase in the previous month, largely due to the resumption of fuel subsidies aimed at helping households cope with higher living costs. It was also the slowest pace since March, raising hopes that the Bank of Japan (BoJ) may hold interest rates steady at its meeting this month. However, earlier this month, BOJ board member Hajime Takata said the central bank should resume rate hikes after a temporary pause to assess the impact of US tariffs on Japan’s economy. The BOJ kept its benchmark interest rate unchanged at 0.5% in its March, May, and June meetings, after raising its key short-term rate by 25 basis points to 0.5% in January, the highest level in 17 years.