Market Updates

Japan's Core Inflation Accelerated Third Consecutive Month In May

Akira Ito
20 Jun, 2025
Tokyo

    Stocks in Tokyo advanced on Friday and erased losses in the previous session, and investors reviewed the latest update on inflation. 

    The Nikkei 225 Stock Average decreased 0.2%, and the broader Topix declined 0.8%, amid rising tensions in the Middle East. 

    Japan's annual inflation rate edged lower in May and dropped to the level last seen in November 2024, according to the Ministry of Internal Affairs and Communications. 

    Consumer price inflation eased to 3.5% in May from 3.6% in the previous two months, after price increases in apparel eased to 2.6% from 2.7%, household items slowed to 3.6% from 3.7%, and healthcare eased to 2.0% from 2.2% a year ago, respectively.

    However, education costs fell further to 5.6%. 

    Core inflation, which excludes food prices but not energy, increased to 3.7% in May and accelerated for the third consecutive month, advancing to the highest level since January 2023. 

    The acceleration of the core inflation reinforced the expectations that the Bank of Japan is likely to continue its rate-tightening campaign in response to sustained inflationary pressures.

     

    Japan Indexes and Stocks 

    The Nikkei 225 Stock Average decreased 0.2% to 38,403.23, and the broader Topix dropped 0.8% to 2,771.26. 

    Toyota Motor Corp. decreased 0.9% to ¥2,502.50, Honda Motor Corp. eased 0.5% to ¥1,423.50, and Nissan Motor Corp. declined 1.4% to ¥346.90. 

    Nippon Yusen KK jumped 0.4% to ¥5,054.0, Mitsui O.S.K. Lines Ltd. gained 0.4% to ¥4,813.0, and Kawasaki Kisen Kaisha Ltd. fell 0.3% to ¥2,023.0. 

     

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