Inflation in Japan cooled down in January, according to new government data released Friday. That’s good news for Prime Minister Sanae Takaichi, who has made fighting rising prices her top priority.
High prices have hurt households for months. In fact, inflation played a big role in pushing out Japan’s last two prime ministers. Takaichi, Japan’s first woman premier, knows people are feeling the pressure.
The latest figures show that “core” inflation — which excludes fresh food — rose 2.0% in January compared to a year earlier. That’s lower than December’s 2.4% rise and matches what economists expected.
When energy prices are also removed, inflation slowed even more than expected. It eased to 2.6%, down from 2.9% in December.
Overall consumer prices rose 1.5%, compared with 2.1% the month before. That drop was slightly bigger than experts had predicted.
One big reason? Petrol prices fell 14.6%. Government subsidies helped make fuel cheaper for drivers.
But not everything is getting cheaper.
Food prices — excluding fresh items — jumped 6.2%. And rice prices, which already doubled last year, surged another 27.9%. For many families, grocery bills are still painful.
Strong political backing
Takaichi is set to give a major policy speech in parliament later Friday.
She was formally reappointed as prime minister on Wednesday, just 10 days after winning a huge election victory. In the snap lower house vote on February 8, the 64-year-old secured a two-thirds majority for her party.
A new poll by the Yomiuri Shimbun shows strong public support. Approval for her cabinet stands at 73% — her highest rating so far.
Tax cuts and debt worries
During her campaign, Takaichi promised to suspend the consumption tax on food for two years to help families cope with rising costs. She is expected to repeat that pledge in her speech.
But that promise has also made investors nervous.
Japan already carries massive debt — often described as “Godzilla-sized.” Last month, yields on long-term government bonds hit record highs, reflecting worries about the country’s finances.
To calm markets, Takaichi has repeated that she will run a “responsible, proactive” fiscal policy and work to reduce debt.
She is also expected to announce plans for a cross-party “national council” to discuss tax reform and how to pay for Japan’s growing social security costs as the population ages.
What’s next
Her immediate priority is getting parliament to approve the national budget for the fiscal year starting April 1. The process was delayed because of the election.
She is also expected to say the government wants to update Japan’s 10-year-old “Free and Open Indo-Pacific” strategy, a key foreign policy framework.
For now, the slower inflation numbers give Takaichi some breathing room. But with food prices still high and debt concerns looming, the pressure is far from over.
