FX.co ★ Japan Core Inflation Holds at 3% in November

In November 2025, Japan's core consumer price index—which factors in energy costs but excludes fresh food—experienced a 3% year-on-year rise, consistent with the previous month's figures and market predictions. This increase remains above the Bank of Japan's 2% inflation target, suggesting the possibility of an imminent interest rate hike. Market speculations suggest that the central bank will likely raise its policy rate by 25 basis points to 0.75% this Friday to control inflation, with expectations for a further rise to 1% by July of the following year. This outlook, however, is complicated by a downward revision in the third-quarter GDP, reflecting a more pronounced economic contraction than initially estimated. Contributing to the policy discussion, Prime Minister Sanae Takaichi, known for advocating more lenient monetary policy, reportedly remarked to a business group on Wednesday that Japan should focus on active fiscal spending instead of excessive tightening to stimulate growth and enhance tax revenues.