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The Star
11 minutes ago
- Business
- The Star
Rice prices double in Japan as inflation accelerates
A customer purchases a bag of government stockpiled rice on sale in a section of convenience store chain Seven-Eleven Japan in Tokyo on June 17, 2025. The price of rice went up 101 per cent on-year in May. - AFP TOKYO: Rice prices doubled last month in Japan as core inflation accelerated, official data showed Friday (June 20), posing a threat to Prime Minister Shigeru Ishiba ahead of July elections. The vote for parliament's upper house, due next month, is crucial for Ishiba after public support for his government tumbled to its lowest level since he took office in October, partly due to frustration over the cost of living. In May, Japan's core inflation rate, which excludes volatile fresh food prices, hit 3.7 per cent - its highest level since January 2023 - interior ministry data showed. The figure narrowly beat market expectations and was up from a 3.5 per cent year-on-year rise logged in April. Rice was more than twice as expensive as a year previously - despite the government releasing its emergency stockpile of the staple grain to try to bring its price down. A supply chain snarl-up has caused a shortage of rice in shops, with the grain's price up 101 per cent on-year in May, compared to the eye-watering 98 per cent rise in April. The government began releasing stockpiles in February in an attempt to drive down prices, something it has only previously done during disasters. Electricity bills were 11.3 per cent higher in May, and gas fees rose 5.4 per cent, according to Friday's data. Excluding energy and fresh food, Japan's consumer price index (CPI) rose 3.3 per cent, compared to April's 3.0 per cent. To help households combat inflation, Ishiba has pledged cash handouts of 20,000 yen (US$139) for every citizen, and twice as much for children, ahead of the election. The 68-year-old leader's coalition was deprived of a majority in the powerful lower house in October as voters vented their anger at rising prices and political scandals. It was the worst election result in 15 years for the Liberal Democratic Party (LDP), which has governed Japan almost continuously since 1955. Earlier this week the Bank of Japan kept its interest rates unchanged and said it would taper its purchase of government bonds at a slower pace, as trade uncertainty threatens to weigh on the world's number four economy. "Policy flip-flops and delayed pass-through from producers to consumers mean inflation will slow only gradually in the coming months," said Stefan Angrick of Moody's Analytics. "This will keep a sustained pickup in real wages out of reach, and with it a meaningful uptick in consumption." Factors behind the rice shortages include an intensely hot and dry summer two years ago that damaged harvests nationwide. Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say. The issue was made worse by panic-buying last year prompted by a government warning about a potential "megaquake" that did not strike. Going forward, US tariffs are expected to weigh on Japan's growth, with economists predicting a slowdown ahead. Intensifying fighting between Iran and Israel was also adding pressure for energy prices to head north, posing a further risk to the Japanese economy. - AFP
The Sun
17 minutes ago
- Business
- The Sun
Japan May inflation at two-year high
TOKYO: Japan's core inflation hit a more than two-year high in May and exceeded the central bank's 2% target for well over three years, keeping it under pressure to resume interest rate hikes despite economic headwinds from US tariffs. The data underscores the challenge the Bank of Japan (BOJ) faces in juggling pressure from sticky food inflation and risks to the fragile economy from uncertainty over US President Donald Trump's trade policy. The core consumer price index (CPI), which excludes volatile fresh food costs, rose 3.7% in May from a year earlier, data showed yesterday – exceeding market forecasts for a 3.6% gain and accelerating from a 3.5% increase in April. It was the fastest annual pace since the 4.2% hit in January 2023. The increase was driven by stubbornly high prices of food, excluding volatile fresh items like vegetables, with Japan's staple rice seeing prices double in May from year-before levels. Rice balls cost nearly 20% more than year-before levels, while a bar of chocolate saw prices rise 27%, the data showed. While slower than the 5.3% increase in goods prices, service-sector inflation accelerated to 1.4% in May from 1.3% in April in a sign firms were steadily passing on labour costs. 'Given heightened uncertainty over US tariff policy, the BOJ is taking a wait-and-see approach to scrutinise developments in bilateral trade talks,'said Ryosuke Katagi, market economist at Mizuho Securities. 'But today's data shows anew that domestic inflation is heightening particularly that for goods. When looking just at price moves, conditions for additional rate hikes will likely stay in place throughout 2025,' he said. A separate index that strips away the effects of both volatile fresh food and fuel costs rose 3.3% in May from a year earlier after a 3% rise in April, the data showed. The rise in the index, which is closely watched by the BOJ as a better indicator of demand-driven price moves, was the fastest since January 2024 when it increased 3.5%. Food prices, excluding those of volatile fresh food, rose 7.7% in May from a year earlier, faster than the 7% gain in April, reflecting the pain households are feeling from rising living costs. BOJ policymakers expect such cost-push pressures to moderate later this year and, coupled with expected rises in wages, underpin consumption and keep Japan on track to durably achieve their 2% inflation target backed by solid domestic demand. Analysts polled by Reuters expect core inflation in Tokyo, considered a leading indicator of nationwide trends, to slow to 3.3% in June from 3.6% in May. But some analysts disagree. 'Inflation is overshooting expectations. The rise in food costs is particularly big and re-accelerating this year,' said Yoshiki Shinke, an economist at Dai-ichi Life Research Institute, adding that firms seem keen to raise prices further. 'Core consumer inflation will likely slow below 3% in August and below 2% early 2026. But the pace of slowdown could be more moderate than we expect,' he said. The BOJ ended a massive stimulus programme last year and in January raised short-term rates to 0.5% on the view Japan was on the cusp of durably meeting its 2% inflation target. While the central bank has signalled readiness to raise rates further, the repercussions from higher US tariffs forced it to cut its growth forecasts and complicated decisions around the timing of the next rate increase. Minutes of the BOJ's April 30-May 1 meeting showed the board divided on the future inflation path with some members warning that inflation could overshoot the BOJ's projections. Underscoring its attention to inflationary pressures, a BOJ research paper said hiking rates only gradually as raw material costs rise could heighten the risk of an upward spiral in wages and consumer prices. A slight majority of economists in a Reuters poll expected the BOJ's next 25-basis-point increase to come in early 2026. – Reuters
Eyewitness News
3 hours ago
- Business
- Eyewitness News
Rice prices double in Japan as inflation accelerates
TOKYO - Rice prices doubled last month in Japan as core inflation accelerated, official data showed Friday, posing a threat to Prime Minister Shigeru Ishiba ahead of July elections. The vote for parliament's upper house, due next month, is crucial for Ishiba after public support for his government tumbled to its lowest level since he took office in October, partly due to frustration over the cost of living. In May, Japan's core inflation rate, which excludes volatile fresh food prices, hit 3.7 percent - its highest level since January 2023 - interior ministry data showed. The figure narrowly beat market expectations and was up from a 3.5 percent year-on-year rise logged in April. Rice was more than twice as expensive as a year previously - despite the government releasing its emergency stockpile of the staple grain to try to bring its price down. A supply chain snarl-up has caused a shortage of rice in shops, with the grain's price up 101 percent on-year in May, compared to the eye-watering 98 percent rise in April. The government began releasing stockpiles in February in an attempt to drive down prices, something it has only previously done during disasters. Electricity bills were 11.3 percent higher in May, and gas fees rose 5.4 percent, according to Friday's data. Excluding energy and fresh food, Japan's consumer price index (CPI) rose 3.3 percent, compared to April's 3.0 percent. CASH HANDOUTS To help households combat inflation, Ishiba has pledged cash handouts of 20,000 yen ($139) for every citizen, and twice as much for children, ahead of the election. The 68-year-old leader's coalition was deprived of a majority in the powerful lower house in October as voters vented their anger at rising prices and political scandals. It was the worst election result in 15 years for the Liberal Democratic Party (LDP), which has governed Japan almost continuously since 1955. Earlier this week the Bank of Japan kept its interest rates unchanged and said it would taper its purchase of government bonds at a slower pace, as trade uncertainty threatens to weigh on the world's number four economy. "Policy flip-flops and delayed pass-through from producers to consumers mean inflation will slow only gradually in the coming months," said Stefan Angrick of Moody's Analytics. "This will keep a sustained pickup in real wages out of reach, and with it a meaningful uptick in consumption." Factors behind the rice shortages include an intensely hot and dry summer two years ago that damaged harvests nationwide. Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say. The issue was made worse by panic-buying last year prompted by a government warning about a potential "megaquake" that did not strike. Going forward, US tariffs are expected to weigh on Japan's growth, with economists predicting a slowdown ahead. Intensifying fighting between Iran and Israel was also adding pressure for energy prices to head north, posing a further risk to the Japanese economy.
Mint
3 hours ago
- Business
- Mint
Indian stock market: Israel-Iran war to India-US trade deal— 5 factors that hold keys to trend reversal on Dalal Street
The Indian stock market has been rangebound for almost a month amid heightened geopolitical tensions, Trump's tariff-related uncertainties and stretched valuations. While the benchmark Nifty 50 is up about 1 per cent for June so far, it has stayed in the range of 24,470 to 25,200, failing to hold and extend gains. The domestic market is torn between contrasting triggers, keeping it range-bound. Key macro tailwinds exist on the domestic front. India's GDP is expected to rise about 6-6.5 per cent in FY26, while inflation could fall below 4 per cent. RBI Governor Sanjay Malhotra, after the June policy meeting, lowered the CPI (consumer price index)-based inflation estimates for FY26 to 3.7 per cent from 4 per cent projected earlier while maintaining the real GDP growth estimates at 6.5 per cent for the year. The World Bank expects the Indian economy to grow at 6.3 per cent in FY26. With over 6 per cent growth, India would be the fastest-growing major economy in the world. Moreover, the World Bank expects the Indian economy to grow slightly faster, at 6.5 per cent in FY27 and 6.7 per cent in FY28. On the other hand, geopolitical tensions, global economic slowdown and uncertainty about US President Donald Trump's tariff policies are the key headwinds for the domestic market. Even though domestic consumption remains the dominating theme for the Indian economy, the domestic market cannot completely remain immune to global developments. Let's take a look at five key factors that hold the keys to trend reversal on Dalal Street: The end of the Israel-Iran war could significantly influence market sentiment globally. The Indian stock market may break out on the upside after the two warring countries agree to resolve their issues through talks. "The Nifty, which has been trading within the 24,500-25,000 range for about a month now, is likely to remain within this range in the near term. The upper side of the range will be broken only on news of de-escalation of the Israel-Iran conflict or an abrupt end to the war," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. Experts at Kotak Institutional Equities believe that the Iran-Israel conflict has raised concerns about India's hitherto solid macroeconomic position and highlighted the higher geopolitical risks in the new world order. "The emergence and escalation of the Iran-Israel conflict may have negative consequences for the Indian economy and market, especially as the rich valuations of the Indian market, sectors and stocks leave very little scope for any negative developments," said Kotak. Experts point out that the Indian stock market has maintained its uptrend despite geopolitical instability. A relief on this front can propel the market to new highs. 'Geopolitical tensions increasingly appear to be the new normal. It began with the Russia-Ukraine conflict, over two years ago, followed by the Israel-Hamas war. In between, there were flare-ups between India and Pakistan, and now tensions are escalating between Israel and Iran. Yet, despite these global headwinds, the Indian stock market has continued its upward trajectory. In a more stable geopolitical environment, the market may soar to unprecedented highs,' said Jaspreet Singh Arora, Chief Investment Officer at Equentis Wealth Advisory Services. The US-India trade deal will also be a key factor for the domestic market. India hopes that both countries will finalise a trade deal before Trump's 'reciprocal tariffs' kick in on July 9. "Before the end of July, a trade deal between India and the US should be finalised. The negotiations are on. Many major nations are expected to finalise their deals by the end of next month. This would be a major trigger for the markets," said Arora. US Fed meeting: Rate cuts unlikely; can Powell's hawkish tone upset trend reversal buzz in Indian stock market? (This is a developing story. Please check back for fresh updates.) Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
Japan Today
3 hours ago
- Business
- Japan Today
Rice prices double in Japan as inflation accelerates
By Hiroshi HIYAMA Rice prices doubled last month in Japan as core inflation accelerated, official data showed Friday, posing a threat to Prime Minister Shigeru Ishiba ahead of July elections. The vote for parliament's upper house, due next month, is crucial for Ishiba after public support for his government tumbled to its lowest level since he took office in October, partly due to frustration over the cost of living. In May, Japan's core inflation rate, which excludes volatile fresh food prices, hit 3.7 percent -- its highest level since January 2023 -- interior ministry data showed. The figure narrowly beat market expectations and was up from a 3.5 percent year-on-year rise logged in April. Rice was more than twice as expensive as a year previously -- despite the government releasing its emergency stockpile of the staple grain to try to bring its price down. A supply chain snarl-up has caused a shortage of rice in shops, with the grain's price up 101 percent on-year in May, compared to the eye-watering 98 percent rise in April. The government began releasing stockpiles in February in an attempt to drive down prices, something it has only previously done during disasters. Electricity bills were 11.3 percent higher in May, and gas fees rose 5.4 percent, according to Friday's data. Excluding energy and fresh food, Japan's consumer price index (CPI) rose 3.3 percent, compared to April's 3.0 percent. To help households combat inflation, Ishiba has pledged cash handouts of 20,000 yen for every citizen, and twice as much for children, ahead of the election. The 68-year-old leader's coalition was deprived of a majority in the powerful lower house in October as voters vented their anger at rising prices and political scandals. It was the worst election result in 15 years for the Liberal Democratic Party (LDP), which has governed Japan almost continuously since 1955. Earlier this week the Bank of Japan kept its interest rates unchanged and said it would taper its purchase of government bonds at a slower pace, as trade uncertainty threatens to weigh on the world's number four economy. "Policy flip-flops and delayed pass-through from producers to consumers mean inflation will slow only gradually in the coming months," said Stefan Angrick of Moody's Analytics. "This will keep a sustained pickup in real wages out of reach, and with it a meaningful uptick in consumption." Factors behind the rice shortages include an intensely hot and dry summer two years ago that damaged harvests nationwide. Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say. The issue was made worse by panic-buying last year prompted by a government warning about a potential "megaquake" that did not strike. Going forward, U.S. tariffs are expected to weigh on Japan's growth, with economists predicting a slowdown ahead. Intensifying fighting between Iran and Israel was also adding pressure for energy prices to head north, posing a further risk to the Japanese economy. © 2025 AFP
