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Japan Inflation August 2025

Japan: Inflation eases in August but remains above target

Latest reading: Inflation came in at 2.7% in August, down from July’s 3.1%. August’s print was the weakest since October 2024.

Meanwhile, core inflation—the main metric tracked by the Bank of Japan (BOJ) which strips out fresh food prices—fell to 2.7% in August from July’s 3.0%. The slowdown broadly aligned with market expectations, and was caused by a drop in energy prices—the second in a row—which was a result of a high statistical base of comparison created by the government’s subsidy program ending in the same period last year. However, core inflation remained above the BOJ’s 2.0% target, as has consistently been the case since March 2022; and a measure of ‘core-core’ inflation—which strips out both fresh food and energy costs—fell only slightly to 3.3% from 3.4%.

Meanwhile, annual average inflation fell to 3.2% in August (July: 3.3%).

Finally, consumer prices increased 0.16% in August over the previous month, cooling slightly from the 0.19% rise logged in July.

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