Core consumer prices grew at a slower pace in Tokyo during the month of September, coming in lower than expectations. Core CPI in Tokyo is a leading indicator for core consumer inflation across Japan, growing by 0.5% in September vs. 0.7% in August and 0.6% expected.

This was the slowest pace of growth for Tokyo’s core CPI since May 2018, and was driven mainly by lower energy prices. Meanwhile, core core CPI which excludes both energy as well as food prices registered a 0.6% growth in September vs. 0.7% in August. Overall, Tokyo’s CPI rose by 0.4% YoY in September, lower than the 0.6% growth YoY seen in the previous month.

The weak core CPI readings are well below the 2% inflation target set by the Bank of Japan. In its September meeting, the BOJ had kept rates and its monetary policy on hold, but had signaled a review of its decision during October’s meeting.

The news has caused a weakness in the Japanese yen, with USD/JPY trading bullish as a result. At the time of writing, this forex pair is trading at around 107.80.