An employee at Celsior Wadamachi supermarket in Yokohama, Thursday, January 15, 2026. Rising food prices are a key component of higher inflation, with Friday’s data expected to show that consumer price growth was above the central bank’s four-calendar-year target of 2%.
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Japan’s core inflation rate It slowed sharply to 2.1%, its lowest level since March 2022, down from 2.9% in November, as lower price pressures collided with a political focus on the cost of living and a looming central bank decision.
It was the 45th month in which inflation was above the Bank of Japan’s 2% target.
Core inflation, which undercuts fresh food prices, came in at 2.4%, the lowest since October 2024, in line with analysts’ forecasts. That was down sharply from 3% in November.
The rate of “core” inflation, which lowers fresh food and energy prices, fell to 2.9% from 3% a month ago.
Japan’s full-year inflation According to the government, it was 3.2%. Inflation hit a two-year high in January 2025 before easing for the year.
However, Japan has seen rice inflation reach its peak The highest in more than 50 years In May, the price of rice rose to a record level.
Rice inflation in December was 34.4%, marking the seventh consecutive drop from a year earlier.
Despite this, rice prices in Japan remain at record levels. This was reported by the Ministry of Agriculture of Japan average price During the week ending January 11, the price of a 5 kg bag of rice was 4,267 yen.
In 2025, the spike in rice prices and careless comments on then-Agriculture Minister Taku Eto’s work and It was reported that it was the motivation former Prime Minister Shigeru Ishiba takes personal responsibility for lowering prices due to rice shortages.
Extraordinary elections
The data comes as Prime Minister Sanae Takaichi plans to dissolve Japan’s lower house today in preparation for a snap election on February 8.
Takaichi has made tackling the cost of living a priority and has pledged to suspend Japan’s 8% food tax for 2 years to help households struggling with the rising cost of living.
Last year, his government rolled out a massive $135 billion stimulus package for the country, including measures to expand local government grants and subsidize electricity and gas bills.
The Bank of Japan will also announce its policy decision later this evening, although economists polled by Reuters mostly expect it to remain on hold at 0.75%. New inflation and GDP forecasts for 2026 are also coming from the BOJ.