Recent Tokyo core-core CPI data, which excludes fresh food and energy, accelerated to 3.0% year-over-year in September from 2.0% in August, driven by the phase-out of fuel and utility subsidies alongside pass-through of higher costs from the weak yen, Middle East tensions, and robust demand. This aligns with the Bank of Japan's July 2026 projections for nationwide core inflation around 2.5% in fiscal 2026, with underlying measures approaching or exceeding the 2% target amid wage pressures and service-sector gains. The BOJ's September rate hike to 1.25% and pivot toward curbing overshoot risks reinforce trader expectations that inflation will moderate into the 2.0-2.4% range for the year as energy effects ease and policy tightens gradually. Key upcoming catalysts include the BOJ's October 29-30 meeting and updated quarterly forecasts.