MNI BRIEF: Japan June Core CPI Rises 3.3% Vs. May +3.2%

Japan's annual core consumer inflation rate rose 3.3% y/y in June, accelerating from May’s 3.2% and staying above the Bank of Japan’s 2% target for the 15th consecutive month, data released by the Ministry of Internal Affairs and Communications showed on Friday.

High electricity and food prices drove the increase. The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 4.2% y/y, decelerating from May's 4.3% for the first time in 17 months. The negative contribution from energy on CPI narrowed to -0.56 pp in June from -0.69 pp in May. Prices excluding perishables rose 9.2% y/y, unchanged from May’s 9.2%, while prices for processed foods, accounting for 15% of the total CPI and a major focus for the BOJ, rose 9.8% from May’s 9.6%, indicating pass-through of cost increases continued.

The BOJ board will likely revise up its median forecast for core CPI to 2% or higher from April’s 1.8% next week. (See MNI POLICY: Chances Rising BOJ Ups 2025 Inflation View In Oct)