Japan Inflation Accelerates In April On Reduced Energy Subsidies

TOKYO, (UrduPoint / Pakistan Point News / WAM - 24th May, 2025) Japan's core consumer prices in April climbed 3.5 percent from a year earlier, increasing at the fastest pace in more than two years, driven by reduced government utility subsidies and surging rice prices, government data showed Friday.

Kyodo news reported that the increase in the nationwide core consumer price index, excluding volatile fresh food, followed a 3.2 percent rise in March and was the largest since January 2023, with the key gauge of inflation having remained at or above the Bank of Japan's (BOJ) 2 percent target since April 2022.

Core-core CPI, which strips away both energy and fresh food and shows underlying price trends, was up 3.0 percent in April from the year before, growing from 2.9 percent in the previous month, the Ministry of Internal Affairs and Communications said.

Energy prices rose 9.3 percent, accelerating from a 6.6 percent increase in March, with electricity prices surging 13.5 percent and those for city gas climbing 4.7 percent.

Earlier this year, the government reinstated subsidies for electricity and city gas bills as households continued to grapple with cost of living stresses, but it cut them in the reporting month.

Prices for food, excluding fresh items, rose 7.0 percent, up from 6.2 percent in March, remaining a key contributor to overall price growth as rice prices hit a new record for the seventh consecutive month with a 98.4 percent jump amid persistent supply shortages.

Among other major items, prices for household durable goods increased 6.4 percent, fueled by strong demand for air conditioners due to forecasts of a hot summer.

Service prices, which the BOJ closely monitors when deciding on monetary policy as they often reflect wage increases, gained 1.3 percent in April, slightly down from 1.4 percent in March, due partly to the impact of state subsidies for high school fees.

Experts say that higher rice prices are likely to continue pushing up prices in the service sector, which includes the dining industry, supporting the case for the BOJ to raise interest rates if Japan produces a favourable outcome in tariff negotiations with the United States.