The inflation figure \u2014 which excludes prices of fresh food \u2014 was in line with the 1.4% expected by economists polled by Reuters and unchanged from April. <\/p>\n
Headline inflation edged up to 1.5% from 1.4% a month earlier, while the so called “core-core” inflation rate, which strips out prices of fresh food and energy, eased to 1.8% from 1.9% in April.<\/p>\n
The Nikkei 225<\/a> was 0.81% up after the data release, while yields of 10-year Japanese Government Bonds<\/a> climbed to 2.637%.<\/p>\n The inflation reading comes as the Bank of Japan raised interest rates<\/a> to their highest level since 1995 and warned of a possibility that its key “underlying inflation” metric may overshoot its 2% target due to high energy prices. <\/p>\n Energy prices saw a smaller drop year on year, falling 2.5% compared to the 3.9% dip in April. <\/p>\n While households have been relatively shielded from rising prices by government support measures, businesses have faced stronger cost pressures. <\/p>\n Japan’s\u00a0producer price index<\/a> rose 6.3% in May, marking its fastest pace of increase in more than three years, driven largely by higher energy costs.<\/p>\n “The price pass-through stemming from the rise in crude oil prices has been progressing at a relatively fast pace in business-to-business transactions, which could spread to an increase in consumer prices across a wide range of items,” the central bank noted.<\/p>\n
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