Market Highlight 23.10.2026

Inflation in Japan exceeded the Central Bank’s 2% target for the first time this year. Specifically, the Consumer Price Index (CPI) excluding fresh food rose by 2,1% in September from a year earlier. The increase was driven mainly by higher hotel, water, and food prices, while gasoline tax cuts continued to ease the energy-cost burden on consumers. The result reinforces the likelihood that the Bank of Japan (BOJ) will raise interest rates again in December after hiking rates in September, which marked its second increase within 3 months. The latest CPI data highlight inflationary pressures stemming from the Middle East conflict on Japan, an economy heavily dependent on energy and food imports. Food prices rose sharply by 2,9%, even as rice prices fell by 20,6%, the largest decline in data going back to 1971. In 2025, the sharp rise in rice prices had been one of the main drivers of overall inflation. The Japanese Government has introduced several measures to ease the cost-of-living burden on households. Earlier this month, Japan passed a temporary bill to reduce the sales tax on food for 2 years starting in April.

The JPY posted its strongest gain in nearly a month on Thursday. Markets are seeking a new safe-haven destination in the yen amid declines in global equity markets, elevated crude oil prices due to the prolonged conflict in the Middle East, and growing doubts over the returns on artificial intelligence (AI) investment, which have weighed on the USD.

Interbank USD/VND fell to around 25.825 early yesterday, pressured by the weaker USD in global markets and abundant domestic foreign currency supply.

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