Core consumer prices in Tokyo’s Ku-area rose 2.3% year-on-year in December 2025, easing from 2.8% in the previous month and undershooting market forecasts of 2.5%. The latest reading marked the lowest figure since February but remained above the Bank of Japan’s 2% target, underscoring persistent price pressures in the capital. While Tokyo's headline inflation softened to a more than one-year low of 2% in December, core forces remain firm, reinforcing expectations of a cautious policy path. Governor Kazuo Ueda said this week that underlying price growth is gradually accelerating toward the BoJ’s goal, signaling readiness to tighten further. His remarks followed last week’s rate hike to 0.75%, a 30-year peak, marking another step in unwinding Japan’s decades-long era of ultra-loose policy and near-zero borrowing costs.