Japan’s annual headline inflation rate jumped to 2.8% in May from 2.5% in April, the highest reading since February. The core inflation rate, which excludes fresh food but includes fuel costs, also accelerated to 2.5% from 2.2%, but came in below forecasts of 2.6% amid a sharp jump in energy prices, notably electricity as the government fully removed subsidies.
Core inflation figures have been at or above the Bank of Japan’s 2% target for 26 months in a row.
Monthly, the CPI rose by 0.5%, the most since last October.
Food prices in Japan rose by 4.1% from a year earlier in May 2024, slowing from a 4.3% growth in the previous month and marking the softest increase since June 2022.
Governor Kazuo Ueda recently told parliament that the central bank could raise interest rates in July, depending on economic and price data available at the time.
Despite the hot inflation data, the Nikkei 225 (NKY:IND) rose 0.1% to around 38,690 on Friday. (USD:JPY) is trading at 158.834.