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Japan Core Inflation Slows to 2.7% in August, First Sub-3% Reading in Nine Months

Food costs led by a steep jump in rice prices continue to drive prices higher and strain household budgets.

Overview

  • The nationwide core CPI excluding fresh food rose 2.7% year on year in August to 111.6 (2020=100), according to the Internal Affairs Ministry.
  • The annual increase slowed by 0.4 percentage point from July’s 3.1%, marking a third consecutive month of deceleration.
  • Food price gains were the main source of upward pressure on the index, even as overall inflation cooled.
  • Rice prices were reported up 69.7% from a year earlier, with the pace of increase easing but remaining exceptionally high.
  • Regional data showed Sendai’s core CPI up 3.4%, with food costs elevated and utility charges lower.