Recent readings show Japan’s core-core CPI (excluding fresh food and energy) holding near 1.9% in August 2026, with Tokyo data and economist polls pointing to a September print around 2.0-2.3% as energy-cost pass-through from Middle East tensions and wholesale price gains of 6.8% filter through. Wage growth and service-price momentum continue to support underlying inflation near the Bank of Japan’s 2% target, while government subsidies and base-year effects have capped earlier spikes. Market-implied odds heavily favor a 2.0-2.4% outcome for 2026, reflecting trader consensus that these demand-driven pressures will stabilize rather than accelerate sharply or fade below target. The BOJ’s October 29-30 meeting and fresh quarterly forecasts will test whether policymakers view the trajectory as sufficiently anchored.