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Japan rice prices soar as core inflation accelerates / Photo: Richard A. Brooks - AFP
NYSE - LSE
Japan rice prices soar as core inflation accelerates
Rice prices in Japan last month were almost twice what they were a year earlier, official data showed Friday, as core inflation accelerated in the world's number four economy.
The price of the grain has soared in recent months, prompting Japan's government to release some of its emergency stockpile into the market.
Excluding fresh food, consumer prices rose 3.2 percent in March year-on-year compared to 3.0 percent in February -- in line with market expectations.
Excluding energy as well, prices rose 2.9 percent last month, up from 2.6 percent in February. But overall inflation eased to 3.6 percent from 3.7 percent.
The data is likely to strengthen expectations that the Bank of Japan will hike interest rates, with inflation above the BoJ's target of two percent for almost three years.
However, uncertainty caused by US President Donald Trump's trade policies could prompt the central bank to stick to its current stance for now.
The internal affairs ministry said that the prices of both fresh and non-fresh food products rose, as did hotel fees.
But grain prices saw the biggest increase, rising 25.4 percent. Rice prices logged an enormous 92.5-percent jump, driven by a shortage of the staple.
- Rice shock -
Factors behind the shortfall include poor harvests due to hot weather in 2023 and panic-buying prompted by a "megaquake" warning last year.
Record numbers of tourists have also been blamed for a rise in consumption while some traders are believed to be hoarding the grain.
The government began auctioning its rice stockpile last month, the first time since it was started in 1995.
The government has so far released around 210,000 tonnes and plans to auction another 100,000 tons this month, authorities said earlier this month.
Rice also appears to have been a factor in Trump's hefty tariffs of 24 percent on Japanese imports -- currently paused -- into the United States.
The White House has accused Japan of imposing a 700-percent tariff on US rice imports, a claim that Japan's farm minister called "incomprehensible".
But it's not just rice; cabbage prices have also exploded, including by 111.6 percent in March compared to the same month last year.
Last year's record summer heat and heavy rain ruined crops, driving up the cost of the leafy green in what media have dubbed a "cabbage shock".
The rising prices have increased pressure on the government of Prime Minister Shigeru Ishiba to do more to help consumers.
D.Mayer--BlnAP
