Japan July Consumer Prices Rise 3.1%... Inflation Slows Down

Japan's consumer price inflation rate in July exceeded 3%. However, the rate of increase slowed compared to the previous month.

On the 18th, Japan's Ministry of Internal Affairs and Communications announced that the CPI excluding fresh food rose 3.1% year-on-year last month. This is a 0.2 percentage point slowdown from the 3.3% increase in June. With this, Japan's CPI has maintained a 3% range increase for 11 consecutive months.

By item, food excluding fresh food jumped 9.2% compared to a year ago. Accommodation fees rose 5.1%, and communication fees increased significantly by 10.2%.

The core consumer price index, which shows the underlying trend of inflation, rose 3.1% year-on-year, a smaller increase compared to 3.3% in the previous month. The core CPI excludes items with high volatility due to temporary supply shocks such as food and energy.

Stefan Angrick, senior economist at Moody's Analytics, stated, "The resilience of Japan's food inflation remains strong," adding, "Despite external shocks such as Russia's withdrawal from the Black Sea Grain Initiative last month, vulnerability still persists."

Meanwhile, according to the minutes of the July Monetary Policy Meeting released by the Bank of Japan (BOJ), one BOJ board member predicted that inflation in Japan for the second half of the 2024 fiscal year, ending in March next year, will fall below the target rate of 2%.