Japan rebased its consumer price index to 2025, and on the new base July inflation came in at 1.9 percent

102.0. That is the July reading of Japan's consumer price index on a base year that did not apply a month ago.

The Statistics Bureau of Japan released the national July figures on 21 August, and this is the first monthly report published on the 2025 base. The all items index stood at 102.0, up 1.9 percent on the year and 0.4 percent on the month in seasonally adjusted terms. The index excluding fresh food, which is the measure the Bank of Japan watches, was 102.1 and up 1.8 percent. Excluding fresh food and energy as well, it was also 102.1, up 1.9 percent. The release restates the back series on the new base, so June now reads 1.6 percent for the headline and 1.6 percent for the core measure. The Ku-area of Tokyo report for the same month is still on the 2020 base.

Food did the lifting

Headline inflation widened by 0.3 points against June, and the Bureau puts 0.11 points of the widening on fresh food alone. Fresh fish and shellfish rose 12.4 percent, contributing 0.12 points, with tuna up 20.4 percent. Fresh vegetables rose 6.6 percent and tomatoes 13.5 percent. Confectionery rose 6.1 percent, prepared food 3.5 percent, meat 3.9 percent and eating out 1.7 percent. Green tea rose 29.2 percent.

Two service lines matter as much. Motor vehicle related costs rose 2.1 percent and contributed 0.20 points, the largest single contribution in the transport and communication group, and voluntary motor insurance alone accounts for 0.11 of it. Communication charges rose 3.8 percent, with mobile telephone charges up 4.6 percent and worth another 0.11 points. Rent rose 0.5 percent, and private rent 0.7 percent.

The tax cut sitting inside the number

Energy is the part of this release that has to be read twice. The energy group fell 0.4 percent on the year in June and rose 0.6 percent in July, which is what widened the core measure by 0.08 points. Underneath that, electricity went from minus 1.7 percent to minus 0.1 percent and city gas from minus 3.2 percent to minus 1.1 percent, while gasoline fell further, from minus 0.8 percent to minus 1.8 percent. Kerosene is up 15.7 percent on the year.

The Bureau also publishes an estimate of what the abolition of the provisional gasoline tax rate and related policy is doing to the index, and marks it as an estimate. It puts the effect on energy at minus 0.22 points, made up of minus 0.35 points from the current month and plus 0.13 points as the year-earlier effect drops out. For gasoline alone the estimate is minus 0.23 points, from minus 0.34 and plus 0.11.

The largest single drag in the whole release is a school fee. Tuition and other school charges fell 6.4 percent and took 0.14 points off the headline rate, and inside that line private high school tuition fell 73.2 percent, worth minus 0.15 points on its own.