Japan’s Core Inflation Surges to 3.5%: The Highest Jump in Over Two Years – What It Means for You!

Japan’s core inflation rose to 3.5% in April, as reported by government data. This increase was partly driven by a spike in rice prices, prompting the central bank to consider pausing interest rate hikes while evaluating the effects of tariffs from the U.S.

Economists had expected a lower rate of 3.4%, making this the highest inflation rate since January 2023. Headline inflation remained steady at 3.6% year-over-year, staying above the Bank of Japan’s target of 2% for over three years now.

Bank of Japan Governor Kazuo Ueda has hinted at the possibility of raising rates, but he is cautious, wanting to see how U.S. tariffs impact prices. Recently, the average price of rice in supermarkets has hit record highs. A 5-kilogram bag of rice now costs about 4,268 yen ($29.63), which is an increase of 54 yen from the previous week.

Looking ahead, experts suggest inflation may ease. Masato Koike, an economist at Sompo Institute Plus, notes that lower crude oil prices and a stronger yen could bring relief. He also points out that similar scenarios have unfolded in the past. For instance, during Donald Trump’s administration, an oversupply of food due to U.S. tariffs helped lower food prices.

Recent trends on social media show that many consumers are feeling the pinch from rising food prices. Tweets and posts reflect worries about whether these price hikes will continue or if relief is on the way.

In summary, while Japan’s inflation is currently high, there are signs that it may stabilize in the coming months. The central bank will be closely monitoring these developments. For more details on Japan’s economic outlook, you can check the latest government statistics.

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