Japan May Core CPI up 3.2%... Food Price Increase Hits Highest in 47 Years

Slight Slowdown in Increase Compared to Previous Month
Inflation Higher Than BOJ Target
Persistent High Prices Due to Yen Depreciation and Soaring Imports

Excluding fresh food, Japan's core Consumer Price Index (CPI) in May rose 3.2% year-on-year, indicating a slight slowdown in the inflation rate. However, the weak yen and rising import prices are expected to put pressure on prices, suggesting that the high inflation trend will continue for the time being.

On the 23rd, Japan's Ministry of Internal Affairs and Communications announced that the core CPI rose 3.2% year-on-year, with the rate of increase narrowing compared to the previous month (3.4%).

[Image source=Yonhap News]

Rising food and accommodation costs drove the inflation. Food prices excluding fresh food rose 9.2%, marking the highest level in 47 years and 7 months since October 1975 (9.9%). Accommodation costs increased by 9.2% due to the Japanese government's tourism support policies aimed at revitalizing the domestic economy.

Among 522 items excluding fresh food, 439 items recorded price increases compared to the same month last year.

On the other hand, energy prices generally declined. Electricity rates fell by 8.2%, while city gas charges rose 1.4%, a smaller increase compared to the previous month (5.0%). The Ministry of Internal Affairs and Communications analyzed that the government's city gas fee support policy influenced the decline in energy prices.

Japan's inflation peaked at 4.3% in January, then declined to 3.2% in March, but rebounded to 3.5% last month. Since then, prices have fallen again this month. However, Nihon Keizai pointed out that "prices still significantly exceed the Bank of Japan's (BOJ) 2% inflation target, indicating that overall prices remain at a high level."

Japan's inflation trend is expected to continue for the time being. The Nihon Keizai Shimbun forecasted that "the combination of a weak yen and rising import prices could keep inflation at a high level."

This content was produced with the assistance of AI translation services.