Key facts
- Japan's core consumer prices rose 1.6% year-on-year in June.
- This figure matched economists' median estimate.
- An index excluding fresh food and fuel rose 1.7% in June.
- A government white paper noted companies are passing on rising costs faster than in 2022.
- Corporate and household inflation expectations are accelerating, according to the white paper.
Japan's core consumer price index (CPI) increased by 1.6% year-on-year in June, aligning with economists' expectations. This figure remained below the Bank of Japan's 2% target. A government white paper released on Friday highlighted that Japanese companies are passing on rising costs from the Middle East conflict at a faster pace than in 2022. The paper also indicated that corporate and household inflation expectations are accelerating, aligning with the Bank of Japan's view that inflationary pressures are becoming embedded in the economy. The white paper noted companies' spending appetite remains strong, with investment plans exceeding the historical average for two straight years, highlighting the economy's resilience to the conflict-induced energy shock. However, it warned that close attention was needed on the extent to which the Middle East conflict could hurt Japan's economy and output gap. The white paper is compiled by the Cabinet Office, overseen by Economy Minister Minoru Kiuchi.