# Japan's July Core Inflation Reaches 1.8% Amid Middle East Tensions and Weak Yen

*Japan's core inflation rose to 1.8 percent in July, driven by the Middle East conflict and a weak yen.*

August 21, 2026 · business

Japan's core inflation accelerated to 1.8 percent in July, up from 1.6 percent in June, according to official data released on Friday. This rise is attributed to the ongoing Middle East war and a weakening yen, both of which have driven up prices. The core inflation reading, which excludes volatile food prices, was in line with market expectations.

When excluding both food and energy prices, inflation increased to 1.9 percent in July from 1.7 percent in June, matching consensus forecasts. Unadjusted inflation also rose to 1.9 percent from 1.6 percent in June, meeting average economist projections as reported by Bloomberg News.

While a weak yen benefits large Japanese exporters like Toyota and Sony, it raises the cost of imports such as oil and food for resource-scarce Japan. Prime Minister Sanae Takaichi has implemented fuel and energy subsidies to protect consumers from the sharp rise in oil prices caused by the Middle East conflict.

The Bank of Japan, aiming for a two-percent target for core inflation, increased interest rates to a 31-year high in June and is expected to raise them further this year. The yen has lost around half of the gains it saw following a historic joint market intervention by the United States and Japan last month.

Inflationary pressures are a global concern, particularly for countries reliant on imports. Japan's situation underscores the delicate balance between supporting domestic industries and managing the cost of living for its citizens. The Bank of Japan's policy decisions will be closely watched as they aim to stabilize the economy while addressing inflationary trends.

For Bangladesh, understanding Japan's inflationary trends is crucial as it highlights the broader global economic challenges, particularly for countries dependent on imports. The rising costs of essential goods can have significant implications for both consumers and businesses, necessitating careful economic planning and policy adjustments.

## Sources

- BSS

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Source: https://pulsetoday.com.bd/en/business/japan-july-core-inflation-accelerates-to-1-8-percent