Core consumer prices jumped 2.1 percent in May from a year earlier, staying above the Bank of Japan's inflation target for the second straight month, lifted by higher energy and food prices, government data showed Friday.
The nationwide core consumer price index excluding volatile fresh food items rose for the ninth straight month, a sign that cost-push inflation has shown no signs of abating as a sharp slide in the yen continues to inflate import costs for resource-poor Japan.
After the closely watched gauge of inflation leaped 2.1 percent in April, the sharpest gain in about seven years, the pace did not slow in May.
The fading out of the year-on-year impact of lower mobile data fees, still down 22.5 percent in May, is also a factor behind the increase in core CPI, the Ministry of Internal Affairs and Communications said.
The BOJ has maintained its ultralow rate policy on the view that cost-push inflation will only be transitory, diverging from its U.S. and European peers that are raising interest rates to fight inflation. But it has faced increased pressure to tweak policy to address the yen's weakness.
Energy prices surged 17.1 percent from a year earlier. Kerosene prices leaped 25.1 percent and gasoline jumped 13.1 percent even as the government subsidized oil wholesales to curb retail prices rises, the data showed.
Food prices, excluding perishables, gained 2.7 percent, marking the fastest pace of gain in about seven years. Potato chips and hamburgers are among those items that saw price hikes.
"Energy prices may be capped by government subsidies, but food prices will continue to rise in coming months," said Yoshiki Shinke, senior executive economist at the Dai-ichi Life Research Institute.
"Higher prices are negative for consumption. A recovery in demand from COVID-19 fallout is now supporting the economy but once it runs its course, rising prices could be felt like a body blow," he added.
The increasing cost of living is among the key issues in the House of Councillors election next month as opposition parties step up criticism of Prime Minister Fumio Kishida's government for its lack of action.
BOJ chief Haruhiko Kuroda recently came under fire for saying consumers had become "tolerant" of increasing prices, leading to him retracting the comment.
The recent bout of inflation is not desirable and adds downward pressure on the economy, the BOJ governor has said. The Japanese central bank has underscored its commitment to monetary easing until the 2 percent target is achieved in a stable and sustainable manner.
"The situation is severe for consumers because inflation is accelerating at a much faster pace than wages," Shinke said.
The so-called core-core CPI, excluding both energy and fresh food prices, gained 0.8 percent, marking the second straight month of increase.