| Consensus | Consensus Range | Actual | Previous | |
| CPI - Y/Y | 1.8% | 1.6% to 1.9% | 1.4% | 1.5% |
| Ex-Fresh Food - Y/Y | 1.7% | 1.5% to 1.8% | 1.4% | 1.8% |
| Ex-Fresh Food & Energy - Y/Y | 2.2% | 1.9% to 2.3% | 1.9% | 2.4% |
Highlights
Japan's consumer inflation moderated at a faster pace than expected in April as processed food price markups continued easing after domestic rice shortages were resolved last year and free private high school education took effect at the start of fiscal 2026. These factors overwhelmed the effect of a smaller drop in overall energy costs that was caused by the phaseout of three-month electricity and gas heating subsidies.
The year-on-year increase in the core CPI (excluding fresh food) slowed sharply to 1.4% after unexpectedly accelerating to 1.8% in Mach from 1.6% in February. In March, the Iran war drove the national average retail gasoline price to a record high in mid-month, just before renewed subsidies took effect to cap fuel price markups. The core rate remains the slowest since +0.8% seen in March 2022.
The annual rate of the total CPI also eased to 1.4% in April after rising to 1.5% from 1.3%, also the smallest gain since March 2022, when it was 1.2%. A month later the total CPI rate jumped to 2.5% and the core CPI to 2.1% as the world was hit by the full impact of Russia's invasion of Ukraine that triggered a surge in energy and commodities prices amid supply disruption concerns.
Underlying inflation, as measured by the core-core CPI that exclude fresh food and energy, stayed on a downtrend, sliding to 1.9% from 2.4% and well below the recent peak of 3.4% reached in June 2025.
In the April CPI report, private high school tuition fees plunged 68.8% on year that trimmed the overall consumer price rise by 0.18 percentage point after falling 10.6% (-0.03 point) in March. This was offset by a 0.6% rise in public high school fees that had zero contribution to the total CPI, which compared to a 94.1% slump (-0.15 point) in March. The slight increase in public education costs follows the end of the 12-month price-cutting base effect of free tuition fees from grade 10 to 12 at a national level that began on April 1, 2025.
Details:
Japan Apr core CPI (excluding fresh food) +1.4% y/y, 56th straight rise (Mar +1.8%); median forecast +1.7%
Japan Apr annual core CPI of +1.4%, lowest since March 2022 when it was +0.8%
Japan Apr total CPI +1.4% y/y, 56th straight rise (Mar +1.5%); median forecast +1.8%
Japan Apr inflation continues to slow on lower processed food markups, private high school tuition fee slump; energy cost drop smaller
Japan Apr CPI: gasoline price drop deepened in light of new fuel subsidies aimed at easing impact of Mideast conflict
Japan Apr core-core CPI (ex-fresh food, energy) +1.9% y/y, 49th straight rise (Mar +2.4%); median forecast +2.2%
Japan Apr CPI: processed food +4.1% (+1.01 point) vs. +5.2% (+1.27 pt) in Mar
Japan Apr CPI: energy prices -3.9% y/y (-0.31 point) vs. -5.7% (-0.45 pt) in Mar
Japan Apr CPI services (ex-owners' equivalent rent) +1.2% vs. +1.8% in Mar; goods (ex-fresh food) +1.9% vs. +2.1% in Mar
Market Consensus Before Announcement
Japan’s nationwide core consumer price index, excluding fresh food, is expected to decelerate to a 1.7 percent rise on the year in April from 1.8 percent the previous month. The closely watched core measure is forecast to stay below the Bank of Japan’s 2 percent inflation target for a third straight month.
Consumer inflation has remained subdued as the government introduced new gasoline subsidies from mid-March, helping cushion the impact of higher international oil prices driven by persistent geopolitical tensions in the Middle East since February. CPI was also weighed down by slower food price inflation amid fading base effects.
Tokyo CPI, a leading indicator of the national trend, slipped below 2 percent across all three key measures in April as declines in energy prices and child daycare fees weighed on overall prices.
The two other key nationwide CPI measures are expected to show a mixed picture in April compared to the previous month. Overall CPI is forecast to rise 1.8 percent on the year in April after increasing 1.5 percent in March. Core-core CPI, which excludes both fresh food and energy, is seen edging down to 2.2 percent from 2.4 percent the previous month.
Definition
The Consumer Price Index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Annual changes in the CPI represent the rate of inflation.
Description
The CPI has been in the spotlight as Japan struggled to make its way out of deflation. The report tracks changes in the price of a basket of goods and services that a typical Japanese household might purchase. The preferred measure is the year over year percent change. Markets will typically pay more attention to the core measure that excludes only fresh food because volatile food prices can distort overall CPI. A second core measure that excludes energy as well is also available. As the most important inflation indicator, the CPI data are closely monitored by the Bank of Japan. Rising consumer prices may prompt the BoJ to raise interest rates in order to manage inflation and slow economic growth. Higher interest rates make holding the yen more attractive to foreign investors, and this higher level of demand will place upward pressure on the value of the yen.
An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to government securities. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.