Japan: Early signs of rising oil-product prices in May CPI

Research evidence excerpt

Japan: Early signs of rising oil-product prices in May CPI

J P M O R G A N Japan Economic Research

19 June 2026

Japan: Early signs of rising oil-

product prices in May CPI

The May nationwide CPI again saw policy effects mask the fact that underlying Economic and Policy Research

inflation has not slowed very much. Global core inflation (ex. food and energy) Ayako Fujita

rose 0.2%m/m sa, leaving the oya rate unchanged from the previous month at 1.1%, (81-3) 6736-1172

but the downward pressure was concentrated mainly in goods and services related ayako.fujita@jpmorgan.com

to a free education program, as well as energy and durable goods subsidies. That JPMorgan Securities Japan Co., Ltd.

said, signs of a reversal in the disinflation trend are gradually emerging,

particularly in petroleum products and non-durable consumer goods. As for

energy, government gasoline subsidies continue to be a major factor suppressing

prices, but that downward pressure has begun to fade gradually as electricity prices

rise. The slowdown in food inflation, which surged sharply last year, is continuing;

in May it rose 0.2%m/m sa to 3.5%oya.

Looking into the details, in addition to various food prices, categories such as

communications (7.2%oya), home repairs (3.3%), and accommodation (4.8%)

contributed to price increases in May. While rises in communications and

accommodation prices have persisted and are therefore not surprising, the increase

in home repair costs is driven mainly by exterior painting expenses, reflecting that

shortages of petroleum-related products have led to higher prices. Since such price

increases have already been widely reported, inflationary pressures will likely

broaden further from June onward. In addition, medical costs, which were pushed