Japan Inflation October 2022


Japan: Inflation comes in at highest level since January 1991 in October

November 18, 2022

Inflation rose to 3.7% in October, above September’s 3.0%. October's result was the highest inflation rate since January 1991.

The trend pointed up, with annual average inflation coming in at 2.0% in October (September: 1.7%). Meanwhile, core inflation rose to 3.6% in October, from the previous month's 3.0%.

Finally, consumer prices increased 0.59% over the previous month in October, picking up from the 0.38% rise recorded in September. October's figure marked the highest reading since August 2018.

Cost-push factors—a slumping yen and elevated commodity prices—caused food prices to accelerate in October, pushing up inflation in the process. These factors are expected to recede in 2023. Along with new measures announced in the supplementary budget, this should lead inflation to gradually fall until it dips below the BoJ’s 2.0% target in Q2 2023.

That said, there were signs that price pressures were beginning to broaden. Inflation excluding fresh food and energy prices rose to 2.5% in October, from 1.8% in September. If this continues and wage growth begins to pick up, that could lead to higher price pressures becoming sustained—a primary goal of BoJ Governor Kuroda, whose term expires in April.

FocusEconomics panelists project consumer prices to rise 1.6% in 2023, which is up 0.2 percentage points from last month’s forecast, and 0.7% in 2024.


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