The year-on-year rise in Tokyo core consumer inflation accelerated to 1.6% in June from 1.3% in May, marking the first increase since October 2025, though it remained below the Bank of Japan's 2% target for a fifth consecutive month, data from the Ministry of Internal Affairs and Communications showed Friday.: https://www.stat.go.jp/english/data/cpi/1581-z.htmlThe increase reflected a smaller decline in energy prices, which contracted 2.3% y/y against May's 3.7% fall, while prices for food excluding perishables rose 3.9%, easing slightly from 4.1%.The core-core CPI, which excludes fresh food and energy and is closely watched as a gauge of underlying inflation, rose 1.9% y/y in June, up from 1.6% in May but remaining below 2% for a third straight month.Prices of processed food, a category closely watched by Bank of Japan officials because of its sensitivity to domestic economic conditions, rose 3.7% in June, slowing from 4.2% in May. Services inflation was unchanged at 1.1%.The BOJ said in June that the year-on-year rate of increase in core CPI is likely to accelerate to a level clearly above 2%, reflecting higher crude oil prices and continued pass-through of rising costs by firms. (See MNI BOJ WATCH: Uchida Flags More Hikes; No Timing Hint: https://www.mnimarkets/articles/mni-boj-watch-uchida-flags-more-hikes-no-ti ming-hint-1781600971547)In April, the BOJ raised its forecast for core CPI inflation in the current fiscal year to 2.8% from the 1.9% projected in January, citing stronger-than-expected pass-through of higher costs to consumer prices.
Hiroshi Inoue is a correspondent at various esteemed publications including BioRxiv, MNI, Cell Press, and Wiley. He specializes in business and economics, focusing on topics such as economic policy, global and local economies, and international finance, with a keen interest in emerging markets and financial technology. Hiroshi's insights and analyses have been featured in prominent outlets, showcasing his expertise in the banking and financial markets sectors.
