Japan: July 2026 Tokyo CPI

Research evidence excerpt

Japan: July 2026 Tokyo CPI

Global Markets Research

Japan: July 2026 Tokyo CPI 31 July 2026

Economics - Japan

Impact of higher crude oil prices starting to spread beyond Research Analysts

energy prices Japan Economics

Uichiro Nozaki - NSC

Resumption of measures to rein in electricity and gas charges in August uichiro.nozaki@nomura.com

+81 3 6703 1284

Kyohei Morita - NSC

• July Tokyo core CPI inflation was +1.9% y-y, up from +1.6% in June. This was kyohei.morita@nomura.com

somewhat stronger than the market had expected. Around half of the increase was +81 3 6703 1395

attributable to base effects from the previous year, but it also shows that the impact of

higher crude oil and naphtha prices has started to spread to non-energy items.

• The deceleration in food price inflation came to a halt in July. Major food

manufacturers are also scheduled to hike prices from next month onwards.

• With government measures to rein in electricity and gas charges scheduled to be

reinstated in Aug–Oct 2026, we find it hard to envision any major acceleration in

headline inflation. However, we expect inflation excluding extraordinary factors to

edge upwards from August onwards.

Overview: CPI inflation picks up m-m, slightly stronger than market consensus

forecast

Tokyo core CPI inflation (all items, less fresh food) came in at +1.9% y-y in July 2026, up

from +1.6% in June 2026 and above the market consensus forecast (Bloomberg survey

median) of +1.8% (Figure1). Inflation based on the BOJ's version of core-core CPI

(all items, less energy and fresh food) came in at +2.0%, up from the previous month

(+1.9%) and in line with the market consensus. Inflation stripping out energy and food

(but including alcoholic beverages), a definition close to that used for core CPI in the