Recent Tokyo and nationwide data show core-core CPI (excluding fresh food and energy) accelerating to 3.0% y/y in September from 1.9-2.0% in August, driven by cost pass-through, a weak yen, and Middle East-related energy effects, though partly offset by base effects from prior subsidies. The Bank of Japan raised its policy rate to 1.25% in September and signaled a shift toward anchoring underlying inflation near its 2% target, with forecasts pointing to stabilization around that level through fiscal 2026-2027 amid cooling upstream pressures. These dynamics position the 2.0-2.4% range as the dominant market-implied outcome for the 2026 reading, reflecting trader expectations of contained volatility around the central bank’s goal rather than sustained overshoots or undershoots.