Inflation in Japan has hit a 42-year high as government stimulus spending fuels an ongoing rise in consumer prices.
May’s core inflation rate in Japan, which excludes fresh food but does include energy prices, rose 3.2% in May from a year earlier. That exceeded economist forecasts for a 3.1% gain.
The latest increase was driven by price increases for food and daily necessities, as well as ongoing government stimulus.
Core consumer inflation has now stayed above the Japanese central bank’s 2% annualized target for 14 consecutive months.
The “core-core” inflation rate that strips out fresh food and energy costs, and is closely watched by the Bank of Japan, rose 4.3% in May, up from 4.1% in April and the biggest increase since June 1981.
The Japanese government has maintained economic stimulus measures since the Covid-19 pandemic struck in March 2020. Economists are now urging the government to reign in those measures to help lower inflation.