Overview

• Headline inflation in Japan slowed to 3.7% in February 2025, down from a two-year high of 4% in January, but remains above the Bank of Japan's 2% target.
• Core inflation, excluding fresh food, dropped to 3%, while 'core-core' inflation, which excludes fresh food and energy, rose slightly to 2.6%.
• Government subsidies for electricity and gas fees contributed to the easing of inflation, though rising prices for essentials like food and accommodation continue to strain households.
• Japan's largest labor union secured a historic 5.46% wage increase for 2025, the highest in over three decades, potentially influencing future inflation trends.
• The Japanese government auctioned emergency rice stockpiles to combat surging prices caused by supply chain disruptions and poor agricultural output.