Arabic version: تضخم اليابان يبلغ 1.9% مع ارتفاع أسعار الطاقة

According to Cnbc, Japan’s headline inflation rate reached 1.9% in July, its highest level this year, as energy costs increased. Core inflation, which excludes fresh food but includes energy, was 1.8%, in line with expectations.

Energy prices rose for the first time since November 2025 despite government subsidies. Higher oil costs linked to the conflict in the Middle East contributed to the increase. The impact was also reflected in wholesale inflation, which reached 7.2% in July, with electricity charges the largest contributor.

Fresh food prices increased 7% from a year earlier, accelerating from a 3.9% rise in June. The “core-core” inflation rate, which excludes both fresh food and energy, came in at 1.9%. Analysts have said relatively low consumer inflation has been supported by subsidies provided by Prime Minister Sanae Takaichi’s administration to protect consumers from higher energy prices.

The Bank of Japan said in its outlook report last month that core inflation was likely to accelerate to a level “clearly above” 2% from the second half of fiscal 2026, which runs from September to March. It cited wage increases being passed into selling prices, higher crude oil prices and the yen’s recent depreciation, while saying inflation should later move toward 2% as oil prices decline. Krishna Bhimavarapu, APAC economist at State Street Investment Management, said the 1.9% headline reading strengthened his conviction that the BOJ’s next move was likely to be a rate hike in September.