Japan's inflation rate in October dropped to its lowest level since January, falling from 2.5% in September to 2.3%. The core inflation rate, which excludes fresh food prices, also decreased to 2.3%, slightly higher than the 2.2% forecasted by economists surveyed by Reuters.

Despite the weak inflation figures, there is a possibility that the Bank of Japan (BOJ) may consider raising interest rates. According to a survey, 55% of economists anticipate a 25 basis point increase at the December meeting, which would bring the benchmark policy rate to 0.5%. BOJ Governor Kazuo Ueda has indicated that the economy is moving towards sustained inflation driven by wages and has warned against keeping borrowing costs too low.

The central bank's latest summary of opinions suggests that if economic conditions progress as expected, the policy rate could reach 1% by the second half of the 2025 fiscal year at the earliest. The BOJ continues to emphasize the importance of achieving a "virtuous cycle between wages and prices" in its monetary policy strategy.