Japan July Tokyo CPI New Core CPI Accelerates in Line With Market Forecast on Rise in Non Durable Goods Prices

Economics Research 31 July 2026 | 10:33AM JST

Japan: July Tokyo CPI: New Core CPI Accelerates in Line With Market Forecast on Rise in Non-Durable Goods Prices

BOTTOM LINE: The July Tokyo new core CPI rose +0.1 pp from June to +2.0% yoy, in Tomohiro Ota | line with the market forecast. Price increases were notable in non-durable goods Goldman Sachs Japan Co., Ltd. such as food and detergent, while price hikes in durable goods, which likely reflected soaring memory prices, also made a positive contribution. We estimate the new core CPI inflation rate excluding various special factors was +2.5%, up +0.1 pp vs. June. Meanwhile, energy price inflation accelerated, reflecting higher fuel import prices, and the core CPI rose by +0.3 pp to +1.9%, exceeding the market forecast. For the July national CPI, we forecast the core and new core CPI at +1.8% yoy (June: +1.6%) and +1.9% yoy (June: +1.7%), respectively. However, please note that our current forecasts, which are estimated on an old-base basis, are provisional, as the July national CPI will be estimated on a new-base basis following the base-year revision scheduled for August 7.

n Tokyo Core CPI (excl. fresh food), yoy: Jul: +1.9%, GS fcst: +1.8%, BBG consensus: +1.7%, Jun: +1.6% n Tokyo New Core CPI (excl. fresh food and energy), yoy: Jul: +2.0%, GS fcst: +2.0%, BBG consensus: +2.0%, Jun: +1.9% n Tokyo Global Core CPI (excl. food other than alcohol and energy), yoy: Jul: +1.3%, Jun: +1.1% n Tokyo Headline CPI, yoy: Jul: +2.0%, Jun: +1.7%

n Tokyo Core CPI (excl. fresh food), mom: Jul: +0.3%, Jun: +0.3% n Tokyo New Core CPI (excl. fresh food and energy), mom: Jul: +0.3%, Jun: +0.4% n Tokyo Global Core CPI (excl. food other than alcohol and energy), mom: Jul: +0.1%, Jun: +0.4% n Tokyo Headline CPI, mom: Jul: +0.4%, Jun: +0.3%

The July Tokyo new core CPI rose +0.1 pp from June to +2.0% yoy, in line with the market forecast. The main driver was higher prices for non-durable goods, such as some food items, including bread and detergent. While price hikes, likely reflecting

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the impact of “naphtha-flation”, have begun to be seen for items such as detergent and plastic bags, their contribution to the CPI remains small at this point. In addition, price hikes, likely reflecting soaring memory prices for items such as laptop computers and memory cards, also acted as a positive, albeit small, contributing factor.

Private-sector services (excluding rent), which the Bank of Japan regularly refers to, decelerated to +0.8% mom annualized (our estimate), from +3.1% in June. The yoy rate remained flat from +2.9% in June. With the April-May price revision period over, no notable price fluctuations were seen in private-sector services prices. While price increases that likely reflect higher airfares have continued for items such as overseas package tours, this was partly offset by a deceleration in hotel and other accommodation charges.

The global core CPI (which excludes food other than alcohol and energy), which is not affected by food inflation, accelerated to +1.3% yoy in July, from +1.1% in June.

Meanwhile, energy price inflation accelerated, reflecting higher electricity and gas charges that reflect rising fuel import prices. As a result, the July core CPI rose by +0.3 pp to +1.9%, exceeding the market forecast.

The headline index also accelerated to +2.0%, from +1.7% in June, an increase of the same magnitude as that of the core CPI.

The new core CPI excluding special factors (our estimate)* accelerated slightly to +2.5%, from +2.4% in June.

Our July national core and new core CPI forecasts (data to be released on August 21), based on the July Tokyo CPI readings, are +1.8% yoy (June: +1.6%) and +1.9% yoy (June: +1.7%), respectively. However, please note that our current forecasts, which are estimated on an old-base basis, are provisional, as the July national CPI will be estimated on a new-base basis following the base-year revision scheduled for August 7. We will publish revised forecasts in our Focus of the…