Japan's May Inflation Remains Stable; Rice Prices Drop for the First Time in Over Three Years

TOKYO—According to data released by Japan's Ministry of Internal Affairs and Communications, the core Consumer Price Index (CPI)—which excludes volatile fresh food prices—rose by 1.4% year-on-year in May, matching April's figures. Notably, rice prices in Japan declined for the first time in three and a half years.

Reports from AFP indicate that the core-core CPI, which further excludes energy and fresh food, stood at 1.8% in May, slightly down from 1.9% in April and consistent with market projections.

According to the Asahi Shimbun, the headline CPI, including fresh food, rose by 1.5%, a marginal increase from 1.4% in April. The food category as a whole recorded a 3.5% increase. While rice prices fell by 4.9%, categories such as chocolate, coffee beans, tuna, pork, and bento boxes saw significant price hikes.

Rice prices in Japan surged between 2024 and 2025 due to extreme heat affecting supply and panic-buying triggered by earthquake warnings. Successive administrations have since implemented countermeasures, including the release of government rice reserves, to stabilize prices.

On the 17th, the Bank of Japan raised its benchmark interest rate by 25 basis points to 1.0%, marking the highest level since 1995 and the first hike since December of last year.