Japan Inflation Falls to Lowest Since 2022

Japan's annual inflation rate accelerated to 1.7% in June 2026 from 1.5% in the prior month, marking the highest reading since December. The pickup was largely driven by a slower decline in electricity and gas prices as government energy subsidies were scaled back. Price pressures also strengthened for transport (2.4% vs 1.9% in May), housing (1.0% vs 0.9%), household goods (2.4% vs 2.2%), healthcare (1.3% vs flat reading), and miscellaneous items (0.3% vs 0.2%), while clothing inflation held steady (at 1.7%). Recreation inflation eased (1.5% vs 1.7%), while education stayed in deflation (-6.0% vs -6.1%). On the food side, prices increased 3.2% yoy, slowing from 3.5% in May to the weakest pace since July 2024, as rice prices fell for the second month running. Core inflation, which excludes fresh food, rose to 1.6% from 1.4%, matching market consensus and reaching its highest since March. However, core inflation remained below the Bank of Japan's 2% target for a fifth straight month.

Japan’s annual inflation rate edged higher to 1.5% in May 2026 from 1.4% in the previous month, as declines in electricity and gas prices moderated amid the expiration of government subsidies. Price growth also accelerated across several categories, including transport (1.9% vs. 1.5% in April), housing (0.9% vs. 0.8%), clothing (1.7% vs. 1.5%), household goods (2.2% vs. 1.9%), recreation (1.7% vs. 1.3%), and miscellaneous items (0.2% vs. 0.1%). Simultaneously, healthcare costs were unchanged for a second consecutive month while education prices remained in deflation (-6.1% vs -6.1%). On the food side, prices rose by 3.5% yoy, matching April's pace and staying at its slowest rate in 18 months as rice costs fell for the first time since November 2022. Core inflation stood at 1.4%, unchanged from April and in line with market consensus but remained below the central bank’s 2% target for a fourth successive month. On a monthly basis, consumer prices rose 0.4%, up from 0.1% in April.

Japan’s annual inflation edged down to 1.4% in April 2026 from 1.5% in the prior month. Food prices rose the least in 18 months amid a further slowdown in rice costs. Inflation also slowed for transport (1.5% vs 2.1%), housing (0.8% vs 1.0%), clothing (1.5% vs 2.1%), household items (1.8% vs 2.7%), recreation (1.3% vs 2.3%), and miscellaneous goods (0.1% vs 0.7%). Healthcare costs were flat after rising 0.2% previously. Meanwhile, electricity prices fell at a slower pace (-2.6% vs -8.0%), as did gas prices (-3.4% vs -5.2%), with the impact of subsidies fading. Tokyo reportedly moves to ease living costs amid the impact of a weak yen and high energy prices. Core inflation also eased to 1.4% from 1.8% in March, the lowest level since March 2022, remaining below the central bank’s 2% target for a third consecutive month. On a monthly basis, consumer prices inched 0.1% higher, slowing from March's 0.4% increase.