Updated
Updated · CNBC · Jul 24
Japan Core Inflation Rises to 1.6% as Yen Near 163 Lifts Import Costs
Updated
Updated · CNBC · Jul 24

Japan Core Inflation Rises to 1.6% as Yen Near 163 Lifts Import Costs

2 articles · Updated · CNBC · Jul 24

Summary

  • Japan’s core consumer inflation rose to 1.6% in June from 1.5% in May, marking its first increase since March and matching economists’ forecasts.
  • Oil and currency pressures drove the pickup: energy prices fell just 0.1% year on year after a 2.5% drop in May, while the yen hovered near 163 after touching 163.23.
  • Upstream cost pressure remains stronger than consumer inflation, with June producer prices up 7.1%—the highest since March 2023—and petroleum import values surging more than 59% from a year earlier.
  • Underlying domestic price momentum was softer, with core-core inflation easing to 1.7%, its lowest since August 2022, even as Japan imports more than 87% of its energy needs.
  • That mix is keeping the Bank of Japan alert to upside inflation risks, with Reuters reporting some officials see scope for faster rate hikes if weak-yen and fuel-cost pressures intensify.

Insights

Can Japan's interest rate hikes save the yen without triggering a recession amid a global energy crisis?
As imported inflation soars, is Japan's battle against deflation about to become a fight against stagflation?