According to official figures released on Friday, October consumer inflation in Japan increased by 2.9 percent year over year as a result of the government cutting back on subsidies for gas and power bills.
Excluding volatile fresh food costs, the number for the third-largest economy in the world came after a 2.8 percent year-over-year increase in September.
“The drop in electricity and city gas bills shrank although the rise of gasoline prices narrowed,” a statement accompanying the data release said.
The reading was slightly below market expectations of a 3.0 percent increase in a Bloomberg survey.
Japan’s costs increased by 4.0 percent when energy and fresh food were taken out, according to figures released by the ministry of internal affairs.
For the first time since August 2022, inflation decreased to less than three percent in September.
Since January 2022, the government of Prime Minister Fumio Kishida has been offering fuel subsidies; since the start of this year, electricity and gas subsidies have also been offered.
Originally set to expire in September, they opted to extend the help; nevertheless, starting in October, the amount of the subsidy for gas and electricity bills was cut in half.
Earlier this month, Kishida, whose poll numbers are at a record low, announced a stimulus package worth more than $100 billion as he tries to ease the pressure from inflation.
According to national broadcaster NHK, the supplemental budget for this package is anticipated to pass the Lower House on Friday.
The war in Ukraine has caused prices to rise in Japan, as it has in other economies across the world, and a lower yen has further increased the cost of imports.
The Bank of Japan has maintained its ultra-loose monetary policy in the hope that inflation will decrease, in contrast to other significant central banks that have raised interest rates. This has put further pressure on the yen.
