Japan’s annual inflation rate edged higher to 1.5% in May 2026 from 1.4% in the previous month, as declines in electricity and gas prices moderated amid the expiration of government subsidies. Price growth also accelerated across several categories, including transport (1.9% vs. 1.5% in April), housing (0.9% vs. 0.8%), clothing (1.7% vs. 1.5%), household goods (2.2% vs. 1.9%), recreation (1.7% vs. 1.3%), and miscellaneous items (0.2% vs. 0.1%). Meanwhile, healthcare costs were unchanged for a second consecutive month. On the food side, prices rose by 3.5% yoy, matching April's pace and remaining at its slowest rate in 18 months as rice costs fell for the first time since November 2022. Core inflation stood at 1.4%, unchanged from April but remained below the central bank’s 2% target for a fourth consecutive month. On a monthly basis, consumer prices increased 0.4%, up from 0.1% in April.