May 2022 Consumer Price Index
While price hikes spread further, Core CPI is marking time at +2.1% y/y
June 24, 2022
Summary
◆Japan’s May 2022 core CPI (excluding fresh foods) was at +2.1% y/y, marking time in comparison to the previous month’s growth rate. Foods remain a major factor in upward pressure on the index, while growth in energy prices have been mitigated by the government’s program to mitigate extreme fluctuations in the price of fuel oil and other factors.
◆Looking at contribution by component in May 2022, food related items marked time amongst non-durable goods, while energy declined, causing an overall decline in contribution from non-durable goods. On the other hand, contribution to the index from durable goods and semi-durable goods grew.
◆Japan’s core CPI is expected to remain in the range of +2.0% y/y. While the weak yen and highs on the commodities market are expected to continue pushing prices upwards, the government’s program to mitigate extreme fluctuations in the price of fuel oil and other factors are expected to prevent any sharp increases. However, depending on trends in the price of imports, core CPI could experience an upswing.
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