According to the Ministry of Internal Affairs and Communications, July core CPI rose 2.8% year on year. The reduction in energy subsidies and rising food prices continued to push up inflation, increasing uncertainty over interest rate trends.
According to the latest 2020-base Consumer Price Index (CPI) released by the Statistics Bureau of the Ministry of Internal Affairs and Communications on 21 August 2026, July core CPI rose 2.8% year on year. Prices have remained elevated, as reflected in the all-items index excluding fresh food, and the prolonged rise in prices is increasingly becoming a focus of attention. Against this backdrop, the report examines how market attention is turning to the direction of monetary policy.
The main factors pushing up the index include energy prices and the pass-through of higher food costs. Specifically, the gradual reduction of government subsidies for electricity and city gas affected prices, while tighter supply and demand for rice and continued price pass-through for processed foods and soft drinks also contributed. These factors supported the overall rise in prices.
Core-core CPI rose 1.9% year on year, bringing it close to the underlying inflation rate of around 2%, which is considered the Bank of Japan's target. This has strengthened expectations for additional rate hikes, and there is a view that the need for more robust financial strategies, investment decisions and DX investment by companies will increase further.