logo
Japan's core inflation climbs to 3.5%, highest in more than 2 years

Japan's core inflation climbs to 3.5%, highest in more than 2 years

Business Mayor25-05-2025

Global Economy May 23, 2025
TOPSHOT – Customers enter an electronics shop in the Akihabara district of Tokyo on January 12, 2024.
Richard A. Brooks | Afp | Getty Images
Japan's core inflation accelerated to 3.5% in April, government data showed Friday, bolstered in part by surging rice prices, as the central bank considers pausing its rate hike posture to assess the impact of U.S. tariffs.
The core inflation figure, which strips out prices for fresh food, was higher than expectations of 3.4%, according to economists polled by Reuters, rising from 3.2% in the previous month and marking the highest level since January 2023.
Headline inflation climbed 3.6% from a year ago, steady from the prior month and staying above the Bank of Japan's 2% target for more than three years.
Bank of Japan Governor Kazuo Ueda has signaled his stance on intending to raise rates given price trends, while also citing the need to monitor closely the effects of U.S. tariffs.
Rice prices in Japan have doubled over the year. The average price in 1,000 supermarkets across the country reportedly continued to hit record highs, with prices for a 5-kilogram bag of rice hiking by 54 yen from the previous week to 4,268 yen ($29.63) as of May 11.
The country's prime minister, Shigeru Ishiba, has reportedly pledged to lower rice prices to below 4,000 yen ($28) per 5-kilogram bag, staking his job on the line.
The core inflation is expected to ease in the coming months due to lower crude oil prices and the yen's appreciation, said Masato Koike, economist at Sompo Institute Plus.
As seen during Trump's first administration, an oversupply of food stemming from the U.S. tariffs could lead to lower food prices, said Koike, adding that the resumption of government subsidies for electricity and gas bills in the summer will also create downward pressure on inflation.
The Japanese yen strengthened 0.15% to 143.80 against the U.S. dollar following the release, while the benchmark Nikkei 225 rose modestly.
Marcel Thieliant, head of Asia-Pacific at Capital Economics, anticipates the persistent strength in inflation will convince the BOJ to hike interest rates again in October.
Japan currently faces a 10% baseline tariff that U.S. President Donald Trump imposed on most trade partners, alongside a 24% 'reciprocal' tariff, which is set to come into effect in July, unless the country manages to strike a deal with the U.S.
The country is also one of the hardest hit by Trump's 25% levy on auto, steel and aluminum products.
The bilateral negotiation, however, appears to be in a standoff. Japanese senior officials have requested that Washington remove all tariffs on Tokyo, emphasizing that the country will not rush into any deal that puts the country's interests at risk.
READ SOURCE

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

What the 'Big, Beautiful' tax bill means for municipal bonds
What the 'Big, Beautiful' tax bill means for municipal bonds

Yahoo

time32 minutes ago

  • Yahoo

What the 'Big, Beautiful' tax bill means for municipal bonds

JPMorgan raised its forecast for municipal bond sales in 2025 to $560 billion as US lawmakers deliberate over President Trump's "big, beautiful" tax and spending bill in the Senate. Goldman Sachs Asset Management co-head of municipal fixed income Sylvia Yeh weighs in on what policy changes to the US tax code could mean for municipal bond investors, as well as valuation catalysts in comparison to Treasury yields (^TYX, ^TNX, ^FVX). Goldman Sachs manages several municipal bond ETFs (GMUB, GCAL, GMNY, GUMI). To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

US still dependent on Canadian oil, despite Trump's claims, Cenovus CEO says
US still dependent on Canadian oil, despite Trump's claims, Cenovus CEO says

Yahoo

time33 minutes ago

  • Yahoo

US still dependent on Canadian oil, despite Trump's claims, Cenovus CEO says

CALGARY (Reuters) -The U.S. is still reliant on Canadian oil imports, despite claims made by U.S. President Donald Trump, Cenovus Energy's CEO said on Tuesday at a conference in Calgary, Alberta. Trump has threatened on-again, off-again tariffs on Canada's oil, of which nearly 4 million barrels per day are exported to the United States. Canada also remains dependent on U.S. energy systems, Cenovus CEO Jon McKenzie said, adding the country must diversify its customer base. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store