April 22, 2022
Summary
◆Japan’s March 2022 core CPI (excluding fresh foods) was at +0.8% y/y, a growth rate of +0.2%pt in comparison to the previous month. Continued highs in import prices brought further growth in prices of foods (excluding fresh foods) in addition to energy. Though it has been more gradual than in other countries, cost push inflation is progressing in Japan.
◆Looking at year-to-year performance by component in March 2022, non-durable goods contributed to pushing up the index. Energy related components such as “Electricity” and “Gas, manufactured & piped”, as well as “Instant coffee”, “Edible oil” and other foods especially helped push the index up.
◆The growth rate in Japan’s core CPI is expected to grow sharply in April 2022 by nearly +2% y/y, due to the disappearance of influence from cuts in mobile phone rates, and then is expected to continue at the same rate of growth after that point. Highs in the commodities market and the influence of the weak yen are expected to continue bringing upward pressure. However, it should be noted that there are also factors which could hold down growth in prices, including the government’s program to mitigate extreme fluctuations in the price of fuel oil, and the Go To Travel Campaign etc
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