Japan core inflation holds steady in May, matching expectations despite energy price concerns
An employee at the Celsior Wadamachi supermarket in Yokohama, Japan, on Thursday, January 15, 2026. Rising food costs are an important component that pushes inflation even higher. Friday’s data is expected to show consumer price growth has remained above the central bank’s 2% target for four consecutive calendar years.
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of japan core inflation rate It met expectations by holding steady at 1.4% in May, showing that underlying price pressures remain under control despite concerns that higher energy costs could push up inflation.
The inflation figure, which excludes fresh food prices, was in line with the 1.4% expected by economists polled by Reuters and was unchanged from April.
While headline inflation rose to 1.5% from 1.4% in the previous month, the “core” inflation rate, which excludes fresh food and energy prices, also fell to 1.8% from 1.9% in April.
The inflation data came after the Bank of Japan raised interest rates to their highest level since 1995 and warned that its key measure of “core inflation” could exceed its 2% target due to higher energy prices.
Energy prices posted a smaller year-on-year decline, falling 2.5% compared to a 3.9% drop in April.
While households were relatively protected from rising prices by government support measures, businesses faced stronger cost pressures.
of japan producer price index It rose 6.3% in May, its fastest increase in more than three years, largely due to higher energy costs.
“Price pass-through resulting from increases in crude oil prices progresses relatively quickly across business-to-business transactions, which may spill over to increases in consumer prices across a wide range of items,” the central bank said. he said.
yen At the same time, it remained under pressure, trading at 161 per dollar, despite the intervention of the country’s finance ministry and interest rate increases by the Bank of Japan.
A weak yen will increase inflation, especially at a time when Tokyo must use dollars to buy energy to deal with the effects of the Iran war.
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