Japan's core inflation slows to 1.4% in April as energy prices fall

Japan’s core consumer prices in April rose 1.4 percent from a year earlier, with the increase partly restrained by the introduction of a free lunch program at public elementary schools, government data released on Friday showed, News.Az reports, citing Kyodo.

The nationwide consumer price index, excluding volatile fresh food items, rose 1.4 percent compared to a 1.8 percent increase in March. This marked the lowest level since March 2022, according to the Ministry of Internal Affairs and Communications.

The so-called core-core CPI, which excludes both energy and fresh food to better reflect underlying price trends, increased 1.9 percent in April.

Energy prices declined 3.9 percent year-on-year, following a 5.7 percent drop in March. Gasoline prices fell sharply by 9.7 percent due to government subsidies, while electricity bills decreased by 2.6 percent.

Amid rising crude oil prices driven by the conflict in the Middle East, the government has decided to provide assistance to wholesalers in order to keep the average retail price of gasoline at around 170 yen ($1.06) per liter.

Food prices, excluding fresh items, increased by 4.1 percent during the reporting month, slowing from a 5.2 percent rise in the previous month.

A ministry official noted that “there are no clear signs in the consumer price index” of the impact of the Middle East crisis, including higher crude oil prices. However, the official also added that there were instances where suppliers avoided accepting orders for system kitchens and unit baths, which made it more difficult to collect price data.

These figures will be among the materials reviewed by the Bank of Japan as it considers whether to raise its key policy rate from 0.75 percent in order to sustainably achieve its 2 percent inflation target.

In a separate release, government data showed that Japan’s monthly average real wages fell 0.5 percent in the fiscal year ending in March, marking the fourth consecutive annual decline, as wage increases failed to keep pace with rising prices.

Nominal wages—defined as average monthly cash earnings per worker, including base and overtime pay—rose 2.5 percent to 357,979 yen ($2,250) in fiscal 2025, according to the Ministry of Health, Labor and Welfare.

Consumer prices rose 3.0 percent over the same fiscal year, slowing from an average increase of 3.5 percent in the previous fiscal year.

News.Az 

By Nijat Babayev