#finance #economy #Japan #currency #inflation
Japan’s main inflation rate increased by 3.5% in April, attributed to the rise in the price of rice compared to the previous year, as indicated by government statistics. This inflation trend is also reflected in consumer price measurement, surpassing market expectations from the previous month.
The possible impact of currency inflation could lead the Bank of Japan to consider raising interest rates, according to experts. In March, there was a 2.9% increase in energy prices, which has now stabilized at 3.0% in April. The overall inflation rate remains at 3.6% for both March and the current month.
Japan’s internal inflation has exceeded the Central Bank’s target of 2% for almost three years. However, uncertainties arising from President Donald Trump’s trade policies may prompt the Central Bank to remain cautious in its current stance.
Amidst concerns of global economic uncertainty, the Bank decided to keep its main interest rate stable at the beginning of May but acknowledged the need to reassess economic growth forecasts for Japan due to the increase in inflation.
Regarding this news, Ramesh Khatri from Kansai Nepal News commented that the inflationary pressure on rice prices has created a political challenge for the government. He also noted that the government’s decision to release emergency stockpiles into the market to control price hikes is a step in the right direction. However, factors like extreme weather conditions and the aftermath of the previous year’s earthquake have also contributed to the current situation.
Additionally, the influx of tourists and increased demand for food storage by some businesses have further complicated the issue. Agriculture Minister Taku Ito faced public backlash over the rice price issue, leading to his resignation. Prime Minister Shigeru Ishiba apologized to the public and emphasized the need for a thorough investigation into the matter to address the structural issues causing the price surge.
Economist Marcel Thiliant from Capital Economics suggested that the stability seen in weekly rice prices indicates a need for a gradual softening of rice inflation in the coming months. He also highlighted expectations for the Central Bank to adopt stricter policies to address the situation effectively.
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Author: MAYA | HARUTO
Posted at: May 23, 2025 7:01 pm
