Tokyo inflation unexpectedly remains stable, supporting the cautious attitude of the Bank of Japan on interest rate policies.

Due to temporary factors, Tokyo consumer inflation unexpectedly remained stable, supporting the cautious attitude of the Bank of Japan towards raising benchmark interest rates. The Japanese government announced on Friday that the Tokyo consumer price index rose 2.5% year-on-year in September, lower than the median estimate of a 2.8% increase. Energy prices boosted the index, partly due to the impact of utility subsidies exaggerating the year-on-year data. On the other hand, the government's move to expand free daycare for children starting this month has put pressure on the index. The core price index, excluding energy prices, rose 2.5%, while economists had predicted an increase of 2.9%. At the same time, the overall inflation rate also stood at 2.5%. The Tokyo price index, as a leading indicator of national price trends in Japan, is closely watched by economists.