Asia Economy
Japan’s inflation rate climbs to a 2-year high of 4% in January, supporting rate hike calls from BOJ members

Published Thu, Feb 20 20256:40 PM EST | Updated Thu, Feb 20 2025 • 10:54 PM EST
Lim Hui Jie

Key Points
• Japan’s headline inflation climbed to 4% in January from from 3.6% in December, hitting a two-year high.
• Headline inflation has been above the Bank of Japan’s 2% target for 34 straight months.
• Core inflation — which excludes prices of fresh food — rose to 3.2%, its highest since June 2023.

Japan’s inflation in January climbed 4% year on year, hitting its highest level since January 2023, further strengthening the case for rate hikes by the country’s central bank. ... The core inflation rate — which excludes prices of fresh food — rose to 3.2% from 3% in the prior month and beat economists’ expectations of 3.1%, according to a Reuters poll. This figure was the highest since June 2023.

The so called “core-core” inflation rate, which strips out prices of both fresh food and energy and is closely monitored by the BOJ, climbed slightly to 2.5% from 2.4% in the month before. ... The headline inflation rate, which had come in at 3.6% in December, has remained above the Bank of Japan’s 2% target for 34 straight months.

Immediately after the data release, the yen strengthened 0.15% to trade at 149.39 against the dollar.

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