Tokyo Inflation Eases as Energy Costs Cool Ahead of Election

Inflation in Tokyo showed signs of easing in June, offering a potential boost to the ruling party ahead of Japan’s upcoming national election. According to preliminary government data released Thursday, core consumer prices in the capital rose at a slower pace than in previous months, largely due to a decline in energy costs. The core Consumer Price Index (CPI), which excludes fresh food but includes energy, increased by 2.2% year-on-year—down from 2.5% in May. This marks the second consecutive month of deceleration, signaling that inflationary pressures may be easing after more than a year of steady price increases. Lower electricity and gas prices contributed significantly to the slowdown, as global energy markets stabilized and the yen strengthened slightly, reducing import costs. The easing inflation could influence voter sentiment, as households have been burdened by rising living costs. Prime Minister Fumio Kishida’s administration has been under pressure to strike a balance between supporting the economy and managing public discontent over price hikes. Analysts say that while the moderation in inflation is a welcome sign, the Bank of Japan is likely to remain cautious, monitoring wage growth and underlying demand before adjusting its ultra-loose monetary policy.

ECONOMICS