Japan: Inflation accelerates in May from April
Latest reading: Consumer prices were up 1.5% in annual terms in May, following a 1.4% increase in the prior month.
Relative to the prior month’s data, there were higher price pressures for housing (+0.9% on a year-on-year basis vs +0.8% in April), transportation (+1.9% vs +1.5% in April) and energy (-2.5% vs -3.9% in April). Finally, the change in food prices was the same as in the prior month (+3.5% in May and April).
Meanwhile, core consumer prices increased 1.4% on a year-on-year basis in May, unchanged from the prior month’s reading.
Lastly, consumer prices rose 0.46% in May on a month-on-month basis, following a 0.28% rise in the prior month.
Panelist insight: Nomura’s Uichiro Nozaki and Kyohei Morita commented:
“Apart from higher energy prices, the situation in the Middle East has yet to have much of an impact on inflation in Japan. Going by what we see in terms of price hikes announced by companies, and referencing the typical lag at which cost pass-through has historically shown up in consumer prices, we expect cost pass-through to start pushing up consumer prices in increments starting this summer and then show up more fully in the fall.”