Japan’s CPI increased 0.3% MoM and 3.5% YoY in May, down slightly from 3.6% YoY in April, led by another strong increase in energy prices.

• CPI (less fresh food) increased 0.4% MoM, a moderate increase after a large 0.7% MoM increase in April. The annual rate increased 0.2 ppts to 3.7% YoY, the highest since January 2023.
• Core inflation remained at 1.6% YoY in May, unchanged from April, as it excluded a large increase in energy prices.
• Energy prices increased 1.9% MoM in May, following a 3.1% MoM increase in April, and was the main segment driving the headline monthly gain. The annual rate remained elevated at 8.1% YoY.
• Other segments were mixed with some rising and some falling, including food prices up 0.3% MoM, furniture & household goods up 0.3% MoM, culture & recreation up 0.2% MoM, offset by clothing down -0.1% MoM, transportation & communication down -0.2% MoM, and education down -0.1% MoM.