[Japan] The core CPI for May 2025 rose by 3.7% compared to the same month last year, while rice rose by 101% compared to the same period. | A clear explanation of important economic indicators of Japan and America | Moneyクリ Money's investment information and media useful for money.
Japan Consumer Price Index (Nationwide) for May 2025
【1】Result: While a decline in fresh food is observed, core-core inflation remains strong.
[Chart 1] Results of the National Consumer Price Index (CPI) for May 2025
Source: Created by Monex Securities from the Ministry of Internal Affairs and Communications
The national Consumer Price Index (CPI) for May 2025 showed that the headline overall index rose by 3.5% compared to the same month last year, which is a decrease of 0.1 points from the previous April. The market expectation matched at 3.5%, reflecting a result contributed by the slowdown in inflation of fresh food (Chart 1).
[Figure 2] Contribution breakdown of core CPI (Year-on-Year, %, % Points)
Source: Created by Monex Securities from the Ministry of Internal Affairs and Communications
The core Consumer Price Index (CPI), excluding fresh food, rose by 3.7%, confirming an acceleration in growth for three consecutive months. As shown in Figure 2, while the contributions from energy, goods, and services remained largely flat, the significant increase in food prices has contributed to pushing up the core index. Although there are signs of price declines due to the distribution of stockpiled rice, the high increase of 101.0% in rice prices compared to the same month last year has had an impact.
The overall index excluding highly volatile fresh food and energy (core-core CPI) is also at 3.3%, indicating that the high inflation rate continues above 3%, and food inflation is spreading.
[Figure 3] Core CPI Component Items: Percentage of Items that Increased or Decreased Year-on-Year (by Range, %)
Source: Created by Monex Securities, Ministry of Internal Affairs and Communications
Of the 522 items that make up the core CPI, 421 rose in May, 37 declined, and 64 remained unchanged. The share of items that rose by 4% or more was the top, suggesting that the number of items with high growth is increasing (Chart 3).
【2】Content and Highlights: The number of high-inflation items in the service composition is increasing.
[Chart 4] Contribution breakdown of service inflation (Year-on-Year, %, % points)
Source: Created by Monex Securities from the Ministry of Internal Affairs and Communications
The service CPI, which is closely related to labor costs, rose by 1.4% compared to the same month last year, accelerating by 0.1 percentage points from the previous April. Since entering 2025, it has fluctuated back and forth, but it is believed that there is no sign of a weakening inflation trend in services (Figure 4).
[Figure 5] Year-on-year change rate histogram of general service composition items for May 2025
Source: Created by Monex Securities, Ministry of Internal Affairs and Communications
In the items that constitute general services, which are expected to have a ripple effect on wages (indicators made up of dining out, household-related services, education, medical services, etc. provided by general companies), many items recorded high inflation rates in the data for May this time.
Specifically, items that showed an increase of more than 4% compared to the same month of the previous year account for about 40% of the items that make up general services, indicating a high inflation rate. On the other hand, there are also a certain proportion of items with less than 0%, but more than half of the items exceed 2%, suggesting that the trend of service inflation is continuing (Figure 5).
【3】Impressions: The escalation of the Middle Eastern situation poses a risk of a resurgence in cost-push inflation, and a rate hike aimed at strengthening the yen may also be possible.
[Figure 6] Trends in crude oil prices and related import prices
Source: Bloomberg, created by Monex Securities from the Bank of Japan. The import price index is in yen.
Food inflation centered around rice is likely to gradually slow down due to the distribution of stored rice.
On the other hand, there are concerns about the rising resource prices due to the intensification of the situation in the Middle East. As of June 20, at the time of writing, a hardline stance by the United States against Iran was also observed (although it is uncertain how this will develop), and a return to normalcy may take time. Naturally, if the situation prolongs, there will be an increased awareness of the risk of rising prices, and currently, there will be upward pressure on the import prices of resources, which had been gradually declining (see Chart 6).
In Japan, discussions are underway regarding subsidies for gasoline prices, which may have the effect of mitigating the impact on consumer prices. However, given Japan's high dependence on energy resource imports, there are concerns about a resurgence of cost-push inflation. In the event of accelerated inflation in this scenario (although it is not described as being implemented for that purpose), the likelihood of an early interest rate hike aimed at strengthening the yen is expected to increase.
Monex Securities Financial Intelligence Department Keita Yamaguchi
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
[Japan] The core CPI for May 2025 rose by 3.7% compared to the same month last year, while rice rose by 101% compared to the same period. | A clear explanation of important economic indicators of Japan and America | Moneyクリ Money's investment information and media useful for money.
Announcement on June 20, 2025 (Friday) at 8:30
Japan Consumer Price Index (Nationwide) for May 2025
【1】Result: While a decline in fresh food is observed, core-core inflation remains strong.
[Chart 1] Results of the National Consumer Price Index (CPI) for May 2025
Source: Created by Monex Securities from the Ministry of Internal Affairs and Communications
The national Consumer Price Index (CPI) for May 2025 showed that the headline overall index rose by 3.5% compared to the same month last year, which is a decrease of 0.1 points from the previous April. The market expectation matched at 3.5%, reflecting a result contributed by the slowdown in inflation of fresh food (Chart 1).
[Figure 2] Contribution breakdown of core CPI (Year-on-Year, %, % Points)
Source: Created by Monex Securities from the Ministry of Internal Affairs and Communications
The core Consumer Price Index (CPI), excluding fresh food, rose by 3.7%, confirming an acceleration in growth for three consecutive months. As shown in Figure 2, while the contributions from energy, goods, and services remained largely flat, the significant increase in food prices has contributed to pushing up the core index. Although there are signs of price declines due to the distribution of stockpiled rice, the high increase of 101.0% in rice prices compared to the same month last year has had an impact.
The overall index excluding highly volatile fresh food and energy (core-core CPI) is also at 3.3%, indicating that the high inflation rate continues above 3%, and food inflation is spreading.
[Figure 3] Core CPI Component Items: Percentage of Items that Increased or Decreased Year-on-Year (by Range, %)
Source: Created by Monex Securities, Ministry of Internal Affairs and Communications
Of the 522 items that make up the core CPI, 421 rose in May, 37 declined, and 64 remained unchanged. The share of items that rose by 4% or more was the top, suggesting that the number of items with high growth is increasing (Chart 3).
【2】Content and Highlights: The number of high-inflation items in the service composition is increasing.
[Chart 4] Contribution breakdown of service inflation (Year-on-Year, %, % points)
Source: Created by Monex Securities from the Ministry of Internal Affairs and Communications
The service CPI, which is closely related to labor costs, rose by 1.4% compared to the same month last year, accelerating by 0.1 percentage points from the previous April. Since entering 2025, it has fluctuated back and forth, but it is believed that there is no sign of a weakening inflation trend in services (Figure 4).
[Figure 5] Year-on-year change rate histogram of general service composition items for May 2025
Source: Created by Monex Securities, Ministry of Internal Affairs and Communications
In the items that constitute general services, which are expected to have a ripple effect on wages (indicators made up of dining out, household-related services, education, medical services, etc. provided by general companies), many items recorded high inflation rates in the data for May this time.
Specifically, items that showed an increase of more than 4% compared to the same month of the previous year account for about 40% of the items that make up general services, indicating a high inflation rate. On the other hand, there are also a certain proportion of items with less than 0%, but more than half of the items exceed 2%, suggesting that the trend of service inflation is continuing (Figure 5).
【3】Impressions: The escalation of the Middle Eastern situation poses a risk of a resurgence in cost-push inflation, and a rate hike aimed at strengthening the yen may also be possible.
[Figure 6] Trends in crude oil prices and related import prices
Source: Bloomberg, created by Monex Securities from the Bank of Japan. The import price index is in yen.
Food inflation centered around rice is likely to gradually slow down due to the distribution of stored rice.
On the other hand, there are concerns about the rising resource prices due to the intensification of the situation in the Middle East. As of June 20, at the time of writing, a hardline stance by the United States against Iran was also observed (although it is uncertain how this will develop), and a return to normalcy may take time. Naturally, if the situation prolongs, there will be an increased awareness of the risk of rising prices, and currently, there will be upward pressure on the import prices of resources, which had been gradually declining (see Chart 6).
In Japan, discussions are underway regarding subsidies for gasoline prices, which may have the effect of mitigating the impact on consumer prices. However, given Japan's high dependence on energy resource imports, there are concerns about a resurgence of cost-push inflation. In the event of accelerated inflation in this scenario (although it is not described as being implemented for that purpose), the likelihood of an early interest rate hike aimed at strengthening the yen is expected to increase.
Monex Securities Financial Intelligence Department Keita Yamaguchi