Japan’s inflation exceeded the BOJ’s target for two months in a row in May

Japan’s Ministry of Internal Affairs and Communications reported that the core consumer price index (CPI), which excludes staple food prices, rose 2.1% in May from a year earlier. This was above the Bank of Japan’s (BOJ) inflation target of 2% for the second month in a row, as energy and food prices rose.

Japan’s core CPI has risen for the ninth consecutive month, suggesting that inflation driven by higher costs is unlikely to slow. The depreciation of the yen continues to push up the cost of importing Japanese goods.

Energy prices rose 17.1% year-on-year in May. Meanwhile, kerosene prices rose by 25.1% and gasoline prices by 13.1%, although the government has subsidized wholesale fuel to curb the recent rise in retail prices.

Food prices (excluding fresh food) rose by 2.7%, the fastest increase in seven years.

Rising consumer prices are one of the main issues in next month’s House of Representatives elections, and opposition parties have criticized Prime Minister Fumio Kishida’s government for failing to take action to address the problem.

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