Japan inflation cools to 2.1%, lowest since March 2022, but rice prices loom large ahead of election

Inflation Trends in Japan - Japan's headline inflation rate decreased to 2.1%, the lowest since March 2022, down from 2.9% in November [2] - Core inflation, excluding fresh food prices, is at 2.4%, matching analysts' expectations and the lowest since October 2024, significantly lower than November's 3% [2] - The "core-core" inflation rate, which excludes fresh food and energy prices, eased to 2.9% from 3% the previous month [3] Rice Price Dynamics - Rice inflation for December was recorded at 34.4%, marking a decline for the seventh consecutive month year-on-year, yet prices remain near record levels [4] - The average price of a 5-kilogram bag of rice was reported at 4,267 yen for the week ending January 11 [4] - In May 2025, rice inflation reached its highest level in over 50 years, with prices soaring to record highs [3] Political and Economic Implications - The rising rice prices and subsequent political fallout led to the resignation of then-farm minister Taku Eto in 2025, highlighting the political sensitivity surrounding food prices [5] - Former Prime Minister Shigeru Ishiba took personal responsibility for addressing the rice price crisis amid a shortage [5]