East Asia Econ

Japan – "underlying" inflation still tacking at 2%+

Inflation indicators in yesterday's summary release of the Tankan were already firm. Today's comprehensive release paints a picture that is stronger still. The implication is that one of the BOJ's older measures of underlying inflation, the trimmed mean, is likely to remain above 2% for the next 6M.

Paul Cavey

Oct 2, 2025 • 1 min read

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East Asia Today

Yesterday's summary release of the Tankan showed price pressures remaining firm. That message is a bit stronger still in today's comprehensive release. Despite rising prices, consumer confidence edged up in September. Elsewhere, NPS outflows in Korea continue to offset the large CA surplus.

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East Asia Today

As usual on the 1st of the month, today there's the PMIs and full-month trade data from Korea, as well as the Q4 Tankan for Japan. The regional manufacturing cycle is soft, but Japan non-manufacturing is strong, the Korean PMI bounced, and weak PMIs haven't mattered for actual growth in Taiwan.

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Japan – another solid Tankan

Tomorrow's comprehensive release will add more details, but today's summary Tankan looks solid, for overall sentiment, the labour market, and inflation. For BOJ doves looking for reasons not to hike further, the Tankan doesn't supply them.