Japan’s core consumer inflation accelerated in April, climbing 3.5 percent from a year earlier, marking the sharpest rise in more than two years. The increase, driven by reductions in government energy subsidies and a sustained surge in rice prices, underscores persistent inflationary pressures despite ongoing monetary policy efforts to stabilize price growth.
Data released Friday by the Ministry of Internal Affairs and Communications showed that the nationwide core Consumer Price Index (CPI), which excludes volatile fresh food prices, continued its upward trajectory after a 3.2 percent increase in March. The latest figure represents the largest year-on-year rise since January 2023. Japan’s core inflation has now exceeded the Bank of Japan’s 2 percent target for over three consecutive years, a trend that began in April 2022.
The sharpest price movements were recorded in the energy and food sectors. Energy costs surged 9.3 percent year-on-year in April, an increase from the 6.6 percent gain reported the previous month. Within this category, electricity prices rose by 13.5 percent, while city gas prices increased 4.7 percent. These rises follow the phased reduction of government subsidies aimed at offsetting energy costs, thereby contributing directly to higher household expenses.
Food prices, excluding fresh products, saw a notable rise of 7.0 percent in April compared to the same month last year. This marks an acceleration from the 6.2 percent increase recorded in March. Among food items, rice prices experienced a particularly steep rise, increasing by 98.4 percent year-on-year. This spike represents the seventh consecutive month of record highs for rice, driven by ongoing supply shortages that have constrained availability in the domestic market.
The core-core CPI, a key metric used to gauge underlying inflation trends by excluding both fresh food and energy, rose 3.0 percent in April. This measure was up from a 2.9 percent gain in March, suggesting that inflationary pressures remain broad-based and are not solely attributable to fluctuations in energy or food prices.
The persistence of elevated inflation complicates the Bank of Japan’s monetary policy outlook. Despite gradual steps towards normalization, including a historic interest rate hike earlier this year, inflationary momentum continues to test the central bank’s balancing act between supporting economic growth and achieving price stability.
While some inflationary factors are external and temporary in nature, such as global commodity prices, domestic contributors like food supply constraints and reduced subsidies indicate that elevated inflation may continue in the near term. This adds pressure on policymakers to evaluate further adjustments to fiscal and monetary strategies to manage inflation while supporting households facing rising living costs. – By MENA Newswire News Desk.