Japan: June 2026 Tokyo CPI: CPI inflation picks up, but largely due to policy factors

Research evidence excerpt

Japan: June 2026 Tokyo CPI: CPI inflation picks up, but largely due to policy factors

Global Markets Research

26 June 2026Japan: June 2026 Tokyo CPI

Economics - Japan

Research AnalystsCPI inflation picks up, but largely due to policy

Japan Economicsfactors

Uichiro Nozaki - NSC

Pass-through of higher crude oil prices remains limited uichiro.nozaki@nomura.com

+81 3 6703 1284

Kyohei Morita - NSC

• June Tokyo core CPI inflation was +1.6% y-y, up from +1.3% in May. However, this kyohei.morita@nomura.com

was mainly due to policy factors (the disappearance of the impact of water charge cuts +81 3 6703 1395

and hikes to medical fees).

• While we still see only limited moves to pass on higher crude oil prices to consumers,

we expect a gradual increase from the summer. We also note that commodities

upstream in the supply chain, such as crude oil and naphtha, have fallen sharply

recently.

Overall: CPI inflation accelerated from the previous month due to policy factors

Tokyo core CPI (all items, less fresh food) came in at +1.6% in June 2026, up from +1.3%

in May 2026 and in line with the market consensus forecast (Bloomberg survey median)

(Figure1). The BOJ's version of core-core CPI (all items, less energy and fresh food)

came in at +1.9%, up from +1.6% a month earlier and above the market consensus

forecast of +1.8%. Inflation stripping out energy and food (but including alcoholic

beverages), a definition close to that used for core CPI in the US, came in at +1.1%,

accelerating from +0.7% a month earlier.

The acceleration in inflation from the previous month was driven largely by policy factors,

as discussed below. This was broadly in line with the market consensus, and came as no

surprise overall.