Global Research ab 5 December 2025 We assume USDJPY will reach 152 by end-2026 and 2027, staying within the 2024- 2025 range. Crude oil prices should remain near current levels, implying neither strong upward nor downward pressure on domestic energy prices. However, the government will abolish the provisional gasoline tax and introduce electricity and gas subsidies, leading to substantially lower energy prices. We estimate the former will lower 2026 core CPI by 25bp and the latter by 12bp (63bp in February– ...

Core Insights - The Bank of Japan has set the median forecast for the core-core Consumer Price Index (CPI) for the fiscal year 2027 at 2.0% [1] Economic Indicators - The core-core CPI is a critical measure that excludes volatile items such as fresh food, indicating a stable inflation outlook [1] - The 2.0% forecast reflects the Bank of Japan's ongoing efforts to achieve stable inflation levels in the economy [1] Implications for Monetary Policy - This forecast may influence the Bank of Japan's future monetary policy decisions, particularly regarding interest rates and quantitative easing measures [1] - A stable inflation rate at 2.0% could signal a potential shift in the central bank's approach to managing economic growth and inflation [1]