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Core CPI Up 1.8%, Govt Caps Gasoline at 170 Yen

4/25/2026

23 2 Full Breakdown

Summary

Takaichi Sets Cap

Core CPI rose 1.8% YoY in March, the first rise in five months.
Headline inflation hit 1.5% in March, still below the Bank of Japan’s 2% target.
Prime Minister Sanae Takaichi set a nationwide gasoline price cap at 170 yen per liter.
Finance Minister Satsuki Katayama said the gasoline subsidy, costing about 300 billion yen monthly, follows a 5.7% drop in energy costs in March after the provisional gasoline tax ended.

Summary

BOJ Rate Hike

Wholesale inflation surged in March as firms passed higher raw-material costs to buyers.
Ocean freight costs jumped 42.1% in March, linked to the Strait of Hormuz closure.
Reuters-surveyed economists expect the Bank of Japan (BOJ) policy rate to reach 1.0% by June, with two-thirds forecasting a hike.
Chief economist Takeshi Minami warned the BOJ may hold rates despite high inflation if Iran’s situation worsens.

History

Historical Context

In 1973 OPEC’s embargo caused oil prices to quadruple, hitting Japan which imported 90% of its oil from the Middle East. The government imposed 20% cuts to industrial oil use and allocated billions of yen in subsidies, while diversifying supply and investing in nuclear and fuel-efficient cars—trends that shape today’s policy responses.

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Takaichi Sets Cap

Core CPI rose 1.8% YoY in March, the first rise in five months.
Headline inflation hit 1.5% in March, still below the Bank of Japan’s 2% target.
Prime Minister Sanae Takaichi set a nationwide gasoline price cap at 170 yen per liter.
Finance Minister Satsuki Katayama said the gasoline subsidy, costing about 300 billion yen monthly, follows a 5.7% drop in energy costs in March after the provisional gasoline tax ended.

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