FX.co ★ Japan Inflation Falls to Lowest Since 2022

In December 2025, Japan witnessed a reduction in its annual inflation rate to 2.1%, down from 2.9% in November. This decrease marks the lowest inflation rate recorded since March 2022. The food inflation rate particularly dropped to its lowest in over a year, reaching 5.1% compared to 6.1% in the previous month, driven by the slowest rise in rice prices observed in the last 16 months. Furthermore, the core inflation rate fell to 2.4%, down from 3.0% in the preceding two months, marking the lowest level since October 2024. Nevertheless, it remained above the Bank of Japan’s target of 2% for the 45th consecutive month. On a monthly basis, the Consumer Price Index (CPI) decreased by 0.1%, reversing the 0.3% increase recorded in November, indicating the first decline in nine months.