Saudi Press

Saudi Arabia and the world
Monday, Jul 21, 2025

Japan's May consumer inflation tops BOJ target for 2nd straight month

Japan's May consumer inflation tops BOJ target for 2nd straight month

Japan's annual core consumer inflation topped the central bank's target for a second straight month in May, data showed on Friday, highlighting the intensifying pressure on the country's fragile economy from soaring global raw material costs.
The data challenges the Bank of Japan's view that the recent rise in prices is temporary, and does not warrant withdrawing monetary stimulus.

But with wage growth subdued, many analysts expect the BOJ to remain firmly focussed on stimulating a sluggish economy rather than fight inflation with interest rate hikes.

The nationwide core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, rose 2.1% in May from a year earlier, data showed, matching a median market forecast.

It stayed above the BOJ's 2% target for a second straight month, following a 2.1% rise in April which was the fastest pace of increase in seven years.

The core-core CPI, which strips away both volatile food and fuel costs, was up 0.8% in May from a year earlier after climbing by the same pace in April.

"Food prices are rising quite significantly even as wage growth remains slow. This may hurt consumption and make retailers hesitant of further passing on costs to consumers," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

"I don't think core consumer inflation will hit 3% unless a broader range of daily goods and services prices rise."

While soaring fuel costs remained the key driver of the rise in CPI, the pace of year-on-year increase in energy prices slowed to 17.1% in May from 19.1% in April.

But prices of food excluding volatile vegetable, meat and fish rose 2.7% in May, marking the fastest growth since 2015.

In a glimmer of hope, separate data released by the BOJ on Friday showed the price companies pay each other for services rose 1.8% in May year-on-year.

The increase, which was the fastest annual pace since 2020, partly reflected a rebound in demand for services as COVID-19 infection numbers fell, the data showed.

Rising fuel and food prices, blamed on Russia's invasion of Ukraine and a weak yen that inflates the cost of imports, are expected to keep Japan's core consumer inflation above the BOJ's 2% target for most of this year, analysts say.

But there is little to cheer for the BOJ, which views such cost-push inflation as temporary and a risk to consumption, with households facing rising living costs and slow wage growth.

BOJ Governor Haruhiko Kuroda has repeatedly said the central bank will keep monetary policy ultra-loose until robust domestic demand and strong wage growth become key drivers of inflation.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Emirates Airline Expands Market Share with New $20 Million Campaign
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
×