MNI BRIEF: Japan's June Core CPI Reaches 3.3%

Japan's annual core consumer inflation rate decelerated to 3.3% y/y in June, from May’s 3.7%, marking 39 consecutive months above the Bank of Japan’s 2% inflation target, data released by the Ministry of Internal Affairs and Communications showed on Friday.

Government subsidies contributed to a slowdown in energy prices, which rose 2.9% y/y compared to 8.1% in May and household durable goods, which increased 2.5% versus 3.8% previously. 

However, food prices, excluding perishables, accelerated, rising 8.2% y/y, up from 7.7% in May, driven largely by elevated rice prices.

Underlying inflation, as measured by the core-core Consumer Price Index, which excludes both fresh food and energy, rose 3.4% y/y in June, up from 3.3% in May.

Service prices, which are monitored by the Bank of Japan as an indicator of the virtuous cycle between wage growth and inflation, rose 1.5% y/y in June, up from 1.4% in May.