The Bank of Japan is placing increasing emphasis on “underlying inflation” to justify its cautious approach to further rate hikes, even as headline inflation sits well above target — a move that’s drawing criticism for clouding its policy message.core and headline consumer inflation in Japan remain above 2%BOJ points to a range of less conventional indicators — including the weighted median, mode, and services inflation — to argue that domestic price pressures remain subduedThese underlying metrics are currently tracking below the BOJ’s 2% target, reinforcing Governor Kazuo Ueda’s argument that policy should stay accommodative:“We’ve de-anchored expectations from zero, but haven’t yet re-anchored them at 2%”Info comes via a Reuters report. Adding:services inflation still at just 1.4% in Maypolicymakers remain wary of tightening too quickly and stalling a fragile recoverydivisions within the BOJ are growing Markets now expect the BOJ’s next 25bp hike may not come until early 2026.The Bank next meets on July 30-31, new projections for inflation are expected. This article was written by Eamonn Sheridan at www.forexlive.com.