Japan Inflation Hits 7-Month Low

Japan’s annual inflation rate eased to 3.3% in June 2025 from 3.5% in the previous month, marking the lowest reading since last November. Electricity prices rose much softer (5.5% vs 11.3% in May), as did gas prices (2.7% vs 5.4%). Also, cost moderated for housing (1.0% vs 1.1% in May), transport (2.4% vs 2.7%), household items (2.7% vs 3.0%), healthcare (1.5% vs 2.0%), recreation (2.8% vs 3.0%), and miscellaneous goods (1.2% vs 1.3%). Meanwhile, education costs continued to decline (-5.6% vs -5.6%). In contrast, inflation held steady for clothing (2.6%) and climbed for communications (5.9% vs 1.9%). On the food side, prices rose 7.2%, the most since March, after a 6.5% rise in the prior two months. The surge was due to soaring rice prices, which jumped 100.2% yoy, despite Tokyo’s efforts to curb staple food costs. The core inflation also matched the headline rate at 3.3%, pointing to a three-month low following May’s 3.7%. Monthly, the CPI edged up 0.1%, after a 0.3% increase in May.