Japan Inflation Monitor (June): CPI inflation flat m-m in May, impact of higher crude oil prices still limited

Research evidence excerpt

Japan Inflation Monitor (June): CPI inflation flat m-m in May, impact of higher crude oil prices still limited

Global Markets Research

22 June 2026Japan Inflation Monitor (June)

Economics - Japan

Research AnalystsCPI inflation flat m-m in May, impact of higher

Japan Economicscrude oil prices still limited

Uichiro Nozaki - NSC

Even with fall in BEI along with crude oil prices, concerns about stronger uichiro.nozaki@nomura.com

inflation linger +81 3 6703 1284

Kyohei Morita - NSC

1. Recap of May 2026 all-Japan CPI data kyohei.morita@nomura.com

+81 3 6703 1395

Core inflation in the all-Japan CPI data came in at +1.4% y-y in May, unchanged from Japan Rates Strategy

April. This was in line with the market consensus and came as no surprise. Forces

Tomoaki Shishido - NSCpushing up the inflation reading continued to be countered by government gasoline tomoaki.shishido@nomura.com

subsidies and food disinflation, particularly for rice. +81 3 6703 3941

Private-sector service price inflation accelerated slightly m-m. Changes in prices for

services were somewhat subdued in April, but service price inflation remained in the

general vicinity of +2% y-y.

Excluding energy-related items, the impact of higher crude oil prices on the CPI is still

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

summer and then show up more fully in the fall.

2. Forecast for June 2026 Tokyo-ku area CPI (scheduled for release on 26 May)

3. Our view of the JGBi market: Even with fall in BEI in tandem with crude oil

prices, concerns about stronger inflation linger

10-year BEI turned downward on expectations for an agreement between the US and Iran

followed by a decline in crude oil prices as an agreement was actually reached. However,