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Japan Inflation Slows to 1.5% in January, Core Measures Ease. What Will the BoJ Think?

Japan’s consumer price index slowed sharply in January, with headline inflation dropping to 1.5% year‑over‑year, the lowest level since March 2022 and below expectations. Core inflation excluding fresh food eased to 2.0% YoY, while the core‑core measure fell to 2.6%, ending a 45‑month run above the Bank of Japan’s 2% target. Despite the near‑term slowdown, the BoJ raised its FY2026 inflation projections, and the new government’s two‑year food‑tax suspension could keep price pressures subdued.