Japan's CPI measures changes in consumer prices, published monthly by the Ministry of Internal Affairs and Communications (MIC). After decades of deflation and near-zero prices, Japan has seen a notable return of inflation since 2022.

Why It Matters

Japan's CPI trajectory determines whether the BOJ can sustain its exit from ultra-loose monetary policy. The BOJ's 2% inflation target, long seen as aspirational, became achievable as global inflationary pressures reached Japan.

Market Impact

Rising CPI supports BOJ tightening expectations, strengthening the yen and potentially triggering global bond yield rises (as Japanese capital flows shift). Falling CPI reignites deflation concerns and supports continued accommodation.