A leading indicator of Japan's service-sector inflation held near 3% in October, data showed on Tuesday, offering further evidence that conditions for another near-term interest rate hike by the Bank of Japan were falling into place.

The Bank of Japan is watching service-sector inflation for clues on whether demand-driven price gains are broadening enough to justify further raising interest rates.

Japan’s overall consumer inflation continued to slow in October, but a rise in underlying price pressures could further clear the path for the central bank to hike rates in December.

A leading indicator of Japan's service-sector inflation held near 3% in October, data showed on Tuesday, offering further evidence that conditions for another near-term interest rate hike by the Bank of Japan were falling into place.

Japan's headline inflation rate slipped to 2.3% in October, its lowest level since January and down from the 2.5% seen in September. The core inflation rate fell to 2.3% from 2.4%, slightly higher compared to the 2.

Japan's core consumer prices in October rose 2.3% from a year earlier, slowing from September's pace but continuing to exceed the central bank's 2% target in a sign conditions for further interest rate hikes were falling in place.

The annual inflation rate in Japan fell to 2.3% in October 2024 from 2.5% in the prior month, marking the lowest reading since January. Japan's core consumer price index, which excludes fresh food but includes fuel costs,