January 2024 Consumer Price Index

◆Japan’s January 2024 core CPI (excluding fresh food) recorded +2.0% y/y. New core-core CPI (excluding fresh food and energy) was at +3.5%. Growth in prices on a y/y basis is gradually slowing down.

◆Looking at the y/y change in core CPI in terms of goods and services in January 2024, the growth rate declined in comparison with the previous month in categories, including durable consumer goods, semi-durables, non-durables (excluding fresh food and energy), energy, and services.

◆As for the future of Japan’s core CPI, growth of +3.8% y/y is expected in FY2023, with +1.9% seen in FY2024, and +2.0% expected in FY2025. We estimate that the rate of wage increase, including regular salary increases, in the 2024 spring labor negotiations will be +3.8%, exceeding the previous year's level, which was the highest level in 30 years. We expect the inflation rate, which has been on a downward trend since the fall of 2023, to stabilize at around +2% y/y as companies move to implement price pass-through in response to the increased labor costs resulting from higher wages.