Japan core inflation dips to lowest since November 2024 as rice price surge eases
A store personnel work on August 22, 2025 at a shop at the Tsukiji Foreign Market in Tokyo.
Philip Fung | AFP | Getty Images
Japan’s core inflation rate has fallen to the lowest level since November 2024, it was 2.7% for August and marked a third flat decline.
The core inflation figure, which eliminates fresh food prices, was compatible with 2.7% expected by economists who participated in the survey by Reuters.
The title inflation in the country fell from 3.1% to 2.7% in July and has reached a new low level since November 2024.
The “core core” inflation rate, which eliminates the prices of both fresh food and energy and closely monitored by the Japanese Bank, was 3.3% of 3.4% in July.
Rice inflation, which contributes to the cost of living in the country, fell from 90.7%of July to 69.7%softened, but its historical heights remained high.
The inflation figure comes with the preparation of the Japan Bank to announce the price decision on Friday later. The survey of Reuters economists expects Boj to keep the comparison policy rate by 0.5%.
In the September 12 note, HSBC analysts also agreed with consensus, but predicted that BOJ’s October meeting would increase its rates by 25 basis points.
Analysts, Boj officials are looking for signs of economic flexibility and “We believe that the second quarter GDP pressure that performances better than market expectations has been delivered.”
Japan’s second quarter GDP came above the expectations and in the second quarter of 2025, mostly due to export flexibility, 0.3% growth.
This was compared with the revised 0.1% growth in the first quarterand Reuters were higher than the 0.1% increase expected by economists who participated in the survey.
In addition, when the US trade agreement was concluded, Japan’s exporters were slightly relieved by the risk of higher tariffs, but HSBC warned that slowing down in global trade may still affect them.
In late July, Tokyo reached an agreement with Washington to reduce the tariffs in Japanese exports to 15% from 25% threatened by US President Donald Trump in his “tariff letter”.
In a separate note, they added that Japan’s high inflation pressure, directed by high rice prices, also caused loud calls for higher ratio increases.
Senior Liberal Democratic Party Member Taro Kono As reported “If the Japan Bank delayed a ratio increase, I think it will mean that inflation will continue and everything we import will be higher.”
