Japan saw core inflation rise to 1.8 percent in March, marking its first increase in five months as global tensions push energy prices higher.
Government data showed the figure matched expectations and rose from 1.6 percent in February. Headline inflation also edged up to 1.5 percent but stayed below the central bank’s 2 percent target.
The rise comes as the ongoing conflict involving Iran drives concerns about oil supply and fuel costs. Prime Minister Takaichi considers fuel subsidies and price caps for household burden relief.
Government previously released oil reserves and subsidized gasoline. Officials warn that without support, fuel prices could rise sharply.
Meanwhile, a key inflation measure that excludes both food and energy slipped slightly, suggesting that underlying price growth remains stable.
The Bank of Japan is now under pressure to respond. Analysts expect the central bank to keep interest rates steady for now but maintain a path toward gradual increases.
Rising energy costs may push inflation higher in the coming months, but they could also weaken consumer spending. This creates a challenge for policymakers trying to balance growth with stable prices.
As Japan faces these pressures, both the government and central bank are watching closely for signs of further economic strain.
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