Inflation in Japan
Japan - Inflation
Inflation comes in at highest level since January 1991 in October
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.
Japan - Inflation Data
|Inflation Rate (CPI, annual variation in %)||0.8||-0.1||0.5||1.0||0.5|
5 years of economic forecasts for more than 30 economic indicators.
Japan Inflation Chart
Source: Statistics Bureau of Japan and FocusEconomics calculations.
|Bond Yield||-0.02||-4.41 %||Dec 30|
|Exchange Rate||108.7||-0.35 %||Jan 01|
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Japan: Japanese government unveils JPY 29.1 trillion (USD 200 billion) supplementary budget in November
November 22, 2022
On 8 November, the Japanese government unveiled a JPY 29.1 trillion (USD 200 billion) supplementary budget—worth around 5% of GDP. Around 25% of it will be spent on shielding businesses and households from rising inflation via electricity and fuel subsidies, and measures to boost wages. Additional funds will be spent on initiatives to boost wealth equality, disaster resilience and national security. Impact on inflation: The Japanese government has claimed that the budget will bring down inflation by 1.2 percentage points between January and September next year.
November 18, 2022
Inflation rose to 3.7% in October, above September’s 3.0%.
November 17, 2022
Yen-denominated merchandise exports rose 25.3% over the same month last year in October, weaker than September’s 28.9% jump.
November 16, 2022
Core machinery orders—which cover the private sector, exclude volatile orders and are a leading indicator for capital spending over the coming three-to-six-month period—decreased 4.6% in month-on-month seasonally -adjusted terms in September, which was a smaller drop than August's 5.8% decrease.
November 15, 2022
Industrial production decreased 1.7% month-on-month in seasonally-adjusted terms in September (August: +3.4% mom).