July 2022 Consumer Price Index
As growth rate of foods continues to climb, “Mobile phones” add to upward movement of overall performance
August 19, 2022
Summary
◆Japan’s July 2022 core CPI (excluding fresh foods) was at +2.4% y/y, with the growth rate up by 0.2%pt in comparison to the previous month. While the growth rate of energy continued at about the same level as the previous month, upward pressure from food related components grew stronger, bringing a rise in the growth rate of non-durable goods. Meanwhile, durable goods also brought upward pressure on core CPI due to the influence of “Mobile phones”.
◆Japan’s core CPI is expected to continue experiencing upward pressure influenced by high import prices. Price increases are likely to continue in goods, mainly non-durable consumer goods, and in services, which are more susceptible to import price movements. On the other hand, government policy is expected to bring downward pressure on prices, hence core CPI is expected to move in the range of 2.0% - 2.4% y/y. However, we must remain cautious regarding risk that the growth rate in the price of imports may remain high due to the exchange rate factor.
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