All-Japan CPI: May 2026: Flat m-m; impact of higher crude oil prices still limited

Research evidence excerpt

All-Japan CPI: May 2026: Flat m-m; impact of higher crude oil prices still limited

Global Markets Research

19 June 2026All-Japan CPI: May 2026

Economics - Japan

Research AnalystsFlat m-m; impact of higher crude oil prices still

Japan Economicslimited

Uichiro Nozaki - NSC

Gasoline subsidies and lower rice prices holding inflation down uichiro.nozaki@nomura.com

+81 3 6703 1284

Kyohei Morita - NSC • Core inflation in the all-Japan CPI data came in at +1.4% y-y in May, unchanged from kyohei.morita@nomura.com

April. This was in line with the market consensus and came as no surprise. Forces +81 3 6703 1395

pushing up the inflation reading were countered by government gasoline subsidies

and disinflation in prices for foodstuffs, particularly rice.

• Private-sector service price inflation accelerated slightly m-m while remaining broadly

at +2% y-y.

• Higher crude oil prices have yet to show up in consumer prices to any great extent.

We expect cost pass-through to start gradually showing up in prices starting this

summer and then show up more fully in the fall.

Overview: CPI inflation broadly flat m-m, in line with market consensus forecast

Core CPI inflation (all items, less fresh food) came in at +1.4% y-y in May 2026,

unchanged from April (Figure1). The BOJ's preferred measure of core-core CPI

inflation (all items, less energy and fresh food) came in at +1.8%, down slightly from

+1.9% in April. Both measures were in line with the median Bloomberg survey forecasts.

Inflation for all items excluding energy and food (but including alcoholic beverages)

—a definition similar to that used for core CPI in the US—came in at +1.1%, level with the

previous month’s reading (Figure4). Overall, inflation was broadly flat m-m, and the

results offered no surprises.