Inflation in Japan unexpectedly slowed to 3.2% in May

According to the Ministry of Internal Affairs and Communications of Japan, consumer prices in May increased by 3.2% year-on-year. 

Thus, the inflation rate slowed down compared to April, when it was 3.5%. The consensus forecast of experts assumed a more significant acceleration of inflation – up to 4.1%. 

The increase in prices for furniture and household goods in May slowed to 9.6% from 10% in April. At the same time, utilities became cheaper by 8.3% (-3.8% in April), including a decrease in the cost of electricity by 17.1% (-9.3% in April). 

At the same time, the growth rate of food prices in May accelerated to a record level since September 1976, amounting to 8.6% compared with 8.4% in April. The cost of transport services increased by 2.2% (vs. 1.8% in the previous month), clothing rose by 3.9% (vs. 3.8%), and medical services rose by 2.1% (vs. 1.7%). 

On a monthly basis, consumer prices in May did not change compared to the previous month, and in April they increased by 0.6%. 

Prices excluding fresh food (a key indicator tracked by the country's Central Bank) increased by 3.2% last month compared to the same month of the previous year. This growth slowed down compared to April, when it was 3.4%. 

Inflation, which does not include food and energy, increased to 4.3% in annual terms, compared with 4.1% in the previous month.

Analysts note that the inflation rate in Japan continues to exceed the central bank's target level of 2% for 14 consecutive months.