Tokyo inflation beats expectations

The Consumer Price Index in Tokyo exceeded the Bank of Japan’s 2 percent target in December. The Consumer Price Index (CPI) in Tokyo increased by 4 percent in December 2022 compared to the same period the previous year, due to rising energy and raw material costs. According to data from the Ministry of Internal Affairs and Communications (Soumu), inflation in Tokyo, the capital of Japan, has been on the rise for 16 months, excluding volatile fresh food products. Due to rising energy and raw material costs, the CPI in Tokyo increased by 4 percent in December 2022 compared to the rate in December 2021. This rate, excluding the impact of consumption tax increases, was recorded as the highest inflation increase rate in the Tokyo area since 1982. According to the data announced for December 2022, food prices in Tokyo increased by 7.5 percent, while city gas increased by 36 percent and electricity increased by 26 percent. The reasons for the increase in inflation include the rise in energy and raw material costs and the intermittent depreciation of the Japanese Yen against foreign exchange rates.