Japan May Inflation Rate Higher than Estimated

Japan's consumer price inflation rose to 0.7 percent year-on-year in May of 2018 from 0.6 percent in the prior month and well above market consensus of 0.3 percent. Prices increased at a faster pace for food and transport while cost fell less for housing.

In May, prices of food increased by 0.8 percent year-on-year, after a 0.7 percent rise in April. Cost rose more for fresh fruits (2.6 percent from 2.2 percent); fish and seafood (3.5 percent from 2.6 percent); and dairy product and eggs (3 percent from 2.6 percent), while fell more for fresh food (-0.7 percent from -1.5 percent). 

In addition, cost went up at a faster pace for: transport & communication (1.3 percent from 1.1 percent); and miscellaneous (0.3 percent from 0.1 percent), while inflation was steady for: medical care (1.9 percent); clothes and footwear (0.1 percent); and education (0.3 percent). At the same time, cost of housing declined by 0.1 percent, compared to a 0.2 percent fall in a month earlier. On the other hand, cost increased less for: fuel, light and water charges (3.1 percent from 3.6 percent as cost of electricity increased by 3.3 percent, slower than a 4.4 percent rise in the prior month); and was flat for culture and recreation (after a 0.2 percent rise in April). Meanwhile, cost continued to drop for furniture and household utensils (-1.5 percent from -1.5 percent in the prior month).

Core inflation rate, which excludes fresh food, came in at 0.7 percent, the same as in April and in line with estimates. It remained the lowest figure since September 2017.

On a monthly basis, consumer prices went up by 0.1 percent, compared to a 0.4 percent fall in the preceding month and marking the first monthly rise in three months.

Japan May Inflation Rate Higher than Estimated

Statistics Japan l Rida | rida@tradingeconomics.com
6/22/2018 1:15:57 AM