18.07.2025 01:59
Japan's core inflation rate experienced a slight decrease in June, settling at 3.3 percent. This marks a modest decline from the 29-month high of 3.5 percent recorded in May, offering a temporary reprieve from persistently elevated prices. The core inflation figure, it's important to note, excludes the volatile fresh food category, mitigating the impact of weather and supply chain fluctuations.
These figures, released Friday by Japan's Internal Affairs Ministry, largely aligned with economists' predictions as reported by Reuters. While the core inflation rate showed improvement, the headline inflation rate, encompassing all categories, also decreased to 3.3 percent from the previous month's 3.5 percent. Despite the slowdown, June marked the 39th consecutive month where inflation has surpassed the Bank of Japan's (BOJ) 2 percent target.
Adding to the complexity of the situation, the "core-core" inflation rate – which omits both fresh food and energy prices – climbed to 3.4 percent, up from 3.3 percent in May. This metric, a key indicator of underlying inflationary pressures, remains under close scrutiny by the BOJ as it reflects the persistent upward trend in prices. Although inflation has moderated, price levels remain significantly higher than in previous years, placing a considerable strain on Japanese consumers.
A significant contributor to Japan's recent inflation surge has been the price of rice, a dietary staple. May witnessed a staggering 101.7 percent year-on-year increase in rice prices, the most dramatic rise in over half a century. However, June brought a slight easing, with a 100.2 percent year-on-year increase – the first indication of a price slowdown in several months. This moderation followed the government's strategic release of rice reserves earlier in the year, a move designed to increase supply and curb market speculation.
Despite this intervention, rice prices remain elevated, and authorities caution that the effects of the 2023 harvest, significantly impacted by adverse weather conditions including typhoons and extreme heat, continue to reverberate through the market. These challenging weather patterns resulted in reduced rice production in major growing regions, underscoring the fragility of the food supply chain and the ongoing challenges to controlling inflation.
