Japan Inflation Picks Up

Japan’s annual inflation rose to 1.5% in March 2026 from February’s near four-year low of 1.3%, with transport costs posting the fastest increase in four months (2.1% vs 0.5% in February), amid the effects of the Middle East tensions. Inflation also accelerated for household items (2.7% vs 1.2%), communications (7.0% vs 6.8%), recreation (2.3% vs 2.2%), and miscellaneous goods (0.7% vs 0.6%). Price growth held steady for clothing (at 2.1%) and housing (at 1.0%), but eased for healthcare (0.2% vs 0.4%). Food inflation slowed to a 17-month low (3.6% vs 4.0%), driven by the softest rise in rice prices in two years. Meanwhile, electricity prices (-8.0% vs -8.0) and gas (-5.2% vs -5.1%) fell further, reflecting subsidy effects. Core inflation accelerated to 1.8% from February's 1.6%, but remained below the central bank’s 2% target for the second month. Monthly, the CPI increased 0.4%, reversing a 0.2% decline in January and February and marking the highest reading since January 2025.

Japan’s annual inflation eased to 1.3% in February 2026 from 1.5% in the prior month, the lowest since March 2022. Food inflation remained near a 15-month low (4.0% vs 3.9% in January), driven by the slowest rise in rice prices in 21 months. Price growth also slowed for transport (0.5% vs 0.6%) and clothing (2.1% vs 2.4%). Energy costs stayed negative, with electricity (-8.0% vs -1.7%) and gas (-5.1% vs -2.0%) falling at a steeper rate, reflecting subsidy effects. Education costs fell further (-5.6% vs -5.6%). In contrast, inflation held steady for housing (at 1.0%), healthcare (at 0.4%), and miscellaneous goods (at 0.6%) while accelerating for household items (1.2% vs 0.8%), communications (6.8% vs 6.7%), and recreation (2.2% vs 2.1%). Core inflation slipped to 1.6% from January's 2.0%, the lowest since March 2022, below the central bank’s 2% target for the first time since March 2022. Monthly, the CPI fell 0.2%, matching January's reading and extending declines for the third month.

Japan’s annual inflation eased to 1.5% in January 2026 from 2.1% in the prior month, the lowest since March 2022. Food inflation fell to a 15-month low (3.9% vs 5.1% in December), driven by the slowest rise in rice prices in 18 months. Price growth also eased for transport (0.6% vs 1.9%), healthcare (0.4% vs 0.7%), household items (0.8% vs 1.6%), recreation (2.1% vs 2.3%), and miscellaneous goods (0.6% vs 0.8%). Energy costs stayed negative, with electricity (-1.7% vs -2.3%) and gas (-2.0% vs -2.1%) falling for the second straight month, reflecting subsidy effects. At the same time, education costs declined further (-5.6% vs -5.6%). In contrast, inflation held steady for housing (at 1.0%) while accelerating for clothing (2.4% vs 2.0%) and communications (6.7% vs 6.2% ). Core inflation slipped to 2.0% from 2.4%, the lowest since January 2024, within the central bank’s 2% target. Monthly, CPI fell 0.2%, following a 0.1% drop in December.