Thursday, January 15, 2026, an employee at the Celsior Wadamachi supermarket in Yokohama. Rising food prices are a key factor driving a broader rise in inflation, with data on Friday expected to show consumer price growth has exceeded the central bank’s 2% target for the fourth straight calendar year.
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Japan’s core inflation rate was steady at 1.4% in May, in line with expectations and suggesting underlying price pressures remain subdued despite concerns that rising energy costs could push up inflation.
Inflation, which excludes fresh food prices, was unchanged from April, in line with economists’ forecasts in a Reuters poll of 1.4%.
Headline inflation rose slightly to 1.5% from 1.4% in the previous month, but so-called “core-core” inflation, which excludes fresh food and energy prices, slowed to 1.8% from 1.9% in April.
of Nikkei Stock Average Although the yield rose by 0.81% after the data was released, 10 year government bond It rose to 2.637%.
The inflation figures were announced as the Bank of Japan raised interest rates to the highest level since 1995 and warned that a key “underlying inflation” measure could exceed its 2% target due to soaring energy prices.
Energy prices decreased by 2.5% compared to the same month last year, compared to a 3.9% decline in April.
While government support measures have kept households relatively protected from rising prices, businesses are facing stronger cost pressures.
Japan’s producer price index rose 6.3% in May, the fastest pace in more than three years, mainly due to higher energy costs.
The central bank pointed out, “In business-to-business transactions, the rise in crude oil prices is being passed on to prices at a relatively fast pace, and this may have a ripple effect on the rise in consumer prices for a wide range of items.”
of circle It remains under pressure, trading at $161, despite Treasury intervention and the Bank of Japan’s interest rate hikes.
A weaker yen would raise inflation, especially at a time when Tokyo needs to use dollars to buy energy to deal with the fallout from the Iran war.
