Government stockpiled rice, which was transported by bullet train, or the “shinkansen”, into the capital is handed over to those who pre-ordered bags, at Tokyo Station on June 10, 2025.
Str | Afp | Getty Images
Japan’s core inflation rate accelerated to 2.9% in September, the first increase since May and in line with expectations from economists polled by Reuters.
This was higher than the 2.7% seen in August. The core inflation metric in Japan strips out the prices of fresh food but includes energy costs.
Headline inflation in Japan also climbed to 2.9% from 2.7% the previous month, above the Bank of Japan’s 2% target.
In contrast, the so-called “core-core” inflation rate — which strips out both fresh food and energy costs and is closely monitored by the BOJ — eased to 3% from 3.3% in August.
Rice inflation, which drew headlines earlier this year, eased sharply to 49.2%, down from 69.7% the previous month. In May, rice inflation hit 101.7%, the highest level in 50 years.
The data comes as Japan sees a new prime minister in Sanae Takaichi, who inherits an economy beset by trade uncertainties, cost-of-living worries, and a central bank determined to raise interest rates and normalize monetary policy.
Inflation will be a major bugbear for Takaichi to tackle, experts previously told CNBC. Japan has a large population of retirees drawing pensions and those on a fixed income, making inflation “very painful” for them, Tomohiko Taniguchi, Special Advisor at the Fujitsu Future Studies Center, told CNBC’s “Squawk Box Asia” on Oct 13.
“How to tackle inflation is going to be the first litmus test to judge whether Takaichi could deliver a policy package,” Taniguchi said.
Jesper Koll, expert director at financial services firm Monex Group told CNBC on Wednesday after Takaichi took power that “if inflation in Japan is still is not below 2% in six to nine months time, the popularity of this cabinet is going to plummet because [to] the Japanese people… the number one, number two, number three concern is inflation.”
— This is breaking news, please check back for updates.