A client visits a store in Togoshi Ginza Shopping Street in Tokyo on January 23, 2025.
Philip Fong | AFP | Getty images
The central inflation of Japan cooled to 3.3% in June, decreasing from a maximum of 29 months of 3.7%, since rice inflation showed signs of decrease.
The figure, which eliminates fresh food costs, was in line with the 3.3% expected by economists surveyed by Reuters.
The main inflation rate in the country fell to 3.3%, decreased from 3.5% in May, but marked the 39th consecutive month that inflation has exceeded 2% of the Bank of Japan.
The so -called “nucleus” inflation rate, which eliminates fresh food and energy prices and is closely monitored by the BOJ, rose to 3.4% from 3.3% in the previous month.
Rice prices, which have seen their faster increase rate in more than half a century in May, saw a slight decrease of an increase of 100.2% year after year, compared to the 101.7% jump in May.
Rice prices have begun to decrease after the government released its reserves earlier this year, although prices remain high.
Japan had fought with the increase in rice prices during the second half of 2024 and the first half of 2025 due to bad harvests in 2023.
Harumi Taguchi, main economist of S&P Global Market Intelligence, said that although the June results were in line with expectations, inflationary pressures persist, particularly for articles not subsidized by the Government.
However, I expected inflation to continue moderating, helped by sending rice stocks and measures to contain energy prices during the summer.
“However, if the depreciation of yen persists, the increase in import prices could lead to higher prices. Continuous surveillance is expected in consumer spending as real wages and uncertainties on the economic landscape decrease.”
Krishna Bhimavarapu, APAC economist from State Street Investment Management, also welcomed inflation in flexion, but noted that higher rates further complicate the perspectives for Japan.
Bhimavarapu predicted GDP growth to average 0.4% year after year in 2025.
“Although we expect another walk of the Boj this year, our sentence weakens,” he said, and added that “the market anxiety on the elections could spill greater volatility and that is a key risk ahead.”
Japan goes to surveys for an election of the upper house on July 20, and Nikkei reports that the governing coalition of Prime Minister Shigeru ishiba can lose its majority.
Japan is also dealing with growth concerns about Trump’s tariffs, after the president of the United States, Donald Trump, said Wednesday that he does not expect an agreement with Japan, which increases the fears of higher tariffs that could hinder growth.
The gross domestic product of Japan’s first quarter decreased for the first time in a year, falling 0.2% quarter in the quarter in the three months that ended March as exports fell sharply.
Japan faces a 25% rate that will enter into force on August 1, and currently faces a 25% tax in cars, which are their greatest export to the US.
