Japan Inflation Hits New 23-Year High

The nationwide annual inflation rate accelerated to 3.7 percent in May from 3.4 percent in April, as the effects of a sales tax increase continues to push consumer prices up. However, prices in Tokyo fell 0.2 percent from May to June, suggesting that national inflation will probably slowdown in the coming months.

Year-on-year, cost of fuel, light and water charges increased at a faster 8.9 percent in May, following a 6.9 percent increase in April. Cost of furniture and household utensils rose 5.4 percent in May, the same rate recorded in April and food prices rose 5.3 percent, following a 5 percent increase in the previous month. On a monthly basis, the inflation rate slowed to 0.4 percent from 2.1 percent in April.

The core CPI rose by an annual 3.4 percent in May, higher than a 3.2 percent increase in April, reaching the highest rate in thirty-two years. The monthly rate slowed to 0.4 percent from 2.2 percent in the previous month.

In the Tokyo region, core inflation rate rose by an annual 2.8 percent in June, the same rate recorded in May, while the monthly rate was flat.  Overall consumer prices decelerated to 3.0 percent while the monthly rate fell 0.2 percent.

Japan Inflation Hits New 23-Year High

Joana Taborda | joana.taborda@tradingeconomics.com
6/27/2014 11:14:28 AM