Japan core inflation holds steady in May, matching expectations despite energy price concerns

An employee at the Celsior Wadamachi supermarket in Yokohama, Japan, on Thursday, Jan. 15, 2026. Soaring food costs are a key component driving broader inflation higher, with data Friday expected to show consumer price growth has stayed above the central bank's 2% target for four straight calendar years. Bloomberg | Bloomberg | Getty Images Japan's core inflation rate held steady at 1.4% in May, matching expectations and suggesting that underlying price pressures remained contained despite concerns that higher energy costs could push inflation higher. The inflation figure — which excludes prices of fresh food — was in line with the 1.4% expected by economists polled by Reuters and unchanged from April. Headline inflation edged up to 1.5% from 1.4% a month earlier, while the so called "core-core" inflation rate, which strips out prices of fresh food and energy, eased to 1.8% from 1.9% in April. The inflation data comes as the Bank of Japan raised interest rates to their highest level since 1995 and warned of a possibility that its key "underlying inflation" metric may overshoot its 2% target due to high energy prices. Energy prices saw a smaller drop year on year, falling 2.5% compared to the 3.9% dip in April. While households have been relatively shielded from rising prices by government support measures, businesses have faced stronger cost pressures. …