The BOJ argues today not just that "underlying inflation" has reached 2%, but that it is expected to stay there. However, it seems clear that stability won't be achieved without some help, as its analysis also says that all the risks to prices are to the upside.

With both growth and inflation strengthening, it will be tough for the BOJ not to hike faster – whatever Takaichi thinks. However, back-to-back or 50bp moves are unlikely. Moreover, the peaking of property prices and sluggishness in some wage indicators point to MT headwinds.

Q2 aggregate consumption was weak because incomes were too. Asset incomes are rising, but wages are soft, and in cash terms, the tax burden has been increasing. But while spending in aggregate terms is constrained, the population is falling, so in per capita terms there is actually recovery.

The overall impression from all today's releases is continued inflation pressure supported by a stronger mfg cycle. The signs of a fall-off in services momentum, however, bear monitoring, perhaps showing signs that tightening might actually be biting. If so, the implication is a flatter curve.

I have been thinking that underlying inflation remains modest compared with headline. That is still true, but today's inflation data were strong. Tankan price measures for all firms were firmer than for large firms alone. And Tokyo September inflation was broad as well as strong.

The Tankan survey suggests nominal growth stronger at the margin, but not gaining a lot of new momentum. The tone of the summary of opinions of the September meeting looks similar: likely faster rate hikes, but no sense of the sort of urgency that would make October a live meeting.

Q2 flow of funds: 1) firms remain net savers; 2) the fiscal deficit is under 2% of GDP, and government assets continue to rise; 3) GPIF, foreigners and households are absorbing JGB supply as the BOJ steps back; 4) household equity holdings are up sharply, but mainly because of valuations.

Japan is now seeing the first real upswing in both manufacturing and non-manufacturing since 2017-18. Rising CPI and the JPY aren't the only factors pushing the BOJ towards hikes.

A step-by-step guide to understanding Japan's fiscal position. By using this, you will have a better idea of how to make the assumptions needed for each component of the standard gross debt equation, which can then be plugged into our online model.