April 2023 Consumer Price Index
CPI (excluding fresh food and energy) breaks through to +4% y/y level.
May 19, 2023
Summary
◆Japan’s April 2023 core CPI (excluding fresh food) was at +3.4% y/y. New core-core CPI (excluding fresh food and energy) was at +4.1%, growth of 0.3% pt in comparison to the previous month. Looking at the trend in prices according to the chain index (seasonally adjusted), which removes distortions (upward bias) in CPI figures, new core-core CPI has grown for three consecutive months at +0.5% m/m. New core-core CPI maintains an extremely high pace of growth at around +6% annualized, and the upward trend in prices remains strong.
◆The growth trend in prices is expected to be maintained in the future due to the rise in wage increases. The rate of wage increases is expected to increase significantly in the 2023 spring wage negotiations. Price hikes in a wide range of items, including services, are likely to be implemented due to increased personnel expenses, increasing the likelihood of a shift to a more sustainable demand-pull inflation as seen in the US and Europe.
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