Japan’s annual inflation rate slowed to 2.5% in September, down from 3.0% in August, reaching its lowest point since April. This decline reflects easing pressures on energy and consumer prices, with electricity price growth falling to 15.2% from 26.2% in August, and gas prices rising more slowly at 7.7% compared to 11.1%.

Sectors Showing Price Moderation

Inflation moderated across various sectors. Food prices grew by 3.4%, down from 3.6%, while household items and transport saw smaller increases at 4.8% and 0.1%, respectively. Communication costs dropped further by 2.6%, and education remained deflationary at -1.0%. Meanwhile, housing and healthcare inflation held steady at 0.7% and 1.5%, while clothing and miscellaneous prices edged slightly higher.

Core Inflation and CPI Trends

Core inflation, which excludes food and energy, hit a five-month low of 2.4%, down from 2.8% in August but slightly above the 2.3% forecast. On a monthly basis, the Consumer Price Index (CPI) fell by 0.3%, marking its first drop since February 2023. These figures suggest inflationary pressures are easing, signaling a possible shift in economic conditions.