Japan: June Tokyo CPI signals broadening inflation

Research evidence excerpt

Japan: June Tokyo CPI signals broadening inflation

J P M O R G A N Japan Economic Research

26 June 2026

Japan: June Tokyo CPI signals

broadening inflation

June Tokyo CPI points to broad-based price pressures extending beyond energy. Economic and Policy Research

The official core (ex. fresh food) index rose 0.3%m/m sa and 1.6%oya, in line with Takuho Morimoto

consensus but a tenth above the JPM forecast. The CPI prints continue to be (81-3) 6736-6682

dragged down by policy measures—including energy and education subsidies, takuho.morimoto@jpmorgan.com

free school lunch, temporary waivers of water charges and free nursery. In addition, JPMorgan Securities Japan Co., Ltd.

a meaningful portion of the monthly increase this month reflects a roughly 0.2%pt

base effect stemming from last year’s water charge waiver, which was not

implemented nationwide. Even so, excluding these policy-related distortions, the

underlying inflation trend appears to be firming.

We have not yet seen clear evidence that energy price shocks havebeen passed

through materially into consumer prices. However, inflation impulses outside

energy have strengthened. Core goods prices (ex. food and energy) rebounded,

rising 0.7%m/m sa and 2.0%oya. Within core goods, furniture and household

utensils increased 2.1%oya, led by a 2.8% rise in household durable goods—

potentially reflecting the ongoing surge in global tech-related prices.

On the services side, strength in public transportation persisted (4.3%oya), while

medical care inflation rose to 1.5%oya in June, reflecting the government’s

revisions to medical and long-term care fees starting this month. Public service

prices have been restrained by administrative price settings, but this disinflationary

impulse appears to be approaching an inflection point.