Japan Core Consumer Prices Slow: Ideas Later.

Japan's core consumer prices in Jan. rise 2.0% on year, slowest in 2 yrs

Article source: https://mainichi.jp/english/articles/20260220/p2g/00m/0bu/026000c

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TOKYO (Kyodo) -- Japan's core consumer prices in January increased 2.0 percent from a year earlier, the slowest rise in two years, with the abolition of a provisional gasoline tax contributing to the deceleration, government data showed Friday.

The increase in the nationwide consumer price index, excluding volatile fresh food, slowed from a 2.4 percent rise in December, according to the Ministry of Internal Affairs and Communications.

Since logging 2.0 percent inflation in January 2024, the pace has accelerated, with an average increase of 3.1 percent last year on surging rice and other food prices.

But the slowdown in the reporting month brings the timing of the Bank of Japan's next interest rate hike into renewed focus.

Last December, the BOJ raised its benchmark interest rate to around 0.75 percent, the highest level since 1995, after judging that the likelihood of achieving its 2 percent inflation target was rising.

Core-core CPI, which strips away both energy and fresh food to reflect underlying price trends, rose 2.6 percent in January.

Prices for food, excluding fresh items, climbed 6.2 percent in January, decelerating from a 6.7 percent increase in the previous month. Rice soared 27.9 percent, chocolate 25.8 percent and rice balls 11.8 percent from the previous year.

Energy costs fell 5.2 percent after a drop of 3.1 percent in December, with gasoline plunging 14.6 percent from the year before, the sharpest decline since May 2020.

Japan's provisional gasoline tax was scrapped on Dec. 31 as the government sought to ease the burden on households hit by persistent inflation.

Public high school tuition tumbled 94.1 percent after the government made high school education effectively free.

Meanwhile, convenience store sales in Japan rose 1.1 percent in January from a year earlier as promotional campaigns, including collaboration products, helped boost average spending per customer, an industry body said Friday.

According to the Japan Franchise Association, same-store sales at seven major convenience store operators totaled 927.4 billion yen ($6.0 billion), marking an eleventh consecutive monthly increase. Average spending per customer climbed 1.9 percent to 764.4 yen.

The sales increase was also driven by solid demand for Chinese steamed buns, hot beverages and over-the-counter coffee during the month amid lower temperatures than a year earlier, it said.

The number of shoppers, however, fell 0.8 percent from the previous year to 1.21 billion, marking a seventh straight monthly drop, the association said.