---
title: "Japan's inflation rises again! New Prime Minister Sanna Marin faces her first test upon taking office"
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/262527247.md"
description: "Japan's core inflation rate accelerated due to rising energy costs, with the September CPI increasing by 2.9% year-on-year, up from 2.7% in August. New Prime Minister Kishi Sanae faces governance challenges, with the cost of living crisis becoming a top priority. Economists expect the Bank of Japan to continue its rate hike path, potentially raising rates in December or January next year. Although the government has implemented utility subsidies, the impact on inflation is lagging, and the scale of electricity subsidies has decreased this year. The year-on-year increase in rice prices is 49.2%, remaining at a high level"
datetime: "2025-10-24T01:46:06.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/262527247.md)
  - [en](https://longbridge.com/en/news/262527247.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/262527247.md)
---

> 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/262527247.md) | [English](https://longbridge.com/en/news/262527247.md)


# Japan's inflation rises again! New Prime Minister Sanna Marin faces her first test upon taking office

According to Zhitong Finance APP, Japan's core inflation rate has accelerated due to rising energy costs, highlighting the governance challenges faced by newly appointed Prime Minister Sanna Marin, while also likely allowing the Bank of Japan to maintain its interest rate hike path.

Data released by Japan's Ministry of Internal Affairs and Communications on Friday showed that the consumer price index (CPI) excluding fresh food rose 2.9% year-on-year in September, up from 2.7% in August, marking the first acceleration in four months. This data aligns with economists' median expectations, with most economists believing that last year's more substantial utility subsidy policies have pushed up this year's inflation figures.

![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20251024/1761268236902599.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

This inflation report is the first relevant report since Sanna Marin took office as Prime Minister on Tuesday, supporting her initiative to prioritize the cost of living crisis. This core inflation indicator in Japan has remained at or above the Bank of Japan's 2% target level for three and a half consecutive years, keeping the central bank on a continuous interest rate hike trajectory. Most economists expect the next rate hike could occur in December this year or January next year.

Taro Saito, head of economic research at NLI Research Institute, stated, "The biggest factor driving core inflation up is the impact of last year's large-scale energy subsidies. This data alone will not change the Bank of Japan's stance on interest rate hikes." He believes the Bank of Japan will maintain its policy interest rate next week.

Energy prices rose 2.3% year-on-year, significantly reversing the 3.3% decline in August. To help households cope with the hottest summer on record from July to September, the government implemented utility subsidies. However, the impact on inflation data typically lags by a month, and this year's electricity subsidies are about 40% lower than last year's.

Meanwhile, rice prices, one of the main drivers of inflation this year, rose 49.2% year-on-year, continuing a trend of slowing down and significantly down from 69.7% in August, but still at a high level. As a result, the inflation rate for processed foods fell from 8% to 7.6%.

Economist Taro Kimura commented, "The acceleration of inflation in September highlights the policy challenges for the Bank of Japan—price pressures remain strong, but policymakers are cautious about tightening monetary policy too early. The latest CPI data from Japan shows that, against the backdrop of rising energy costs and wage increases pushing up prices in labor-intensive service industries, the momentum of price increases remains strong."

Bank of Japan Governor Kazuo Ueda previously emphasized that when deciding on the timing of the next interest rate hike, three key factors need to be closely monitored: food inflation, the state of the U.S. economy, and the impact of U.S. tariff policies. Most economists expect that at the central bank's policy committee meeting next week, the Bank of Japan will maintain its policy interest rate.

A core indicator that is closer to potential inflation and excludes energy prices rose 3.0%, slowing from 3.3%. Service prices, a key component of sustainable inflation, rose 1.4% year-on-year, slightly slowing from the previous month Saito from NLI pointed out: "This data confirms that as the increase in rice prices slows down, food inflation has peaked. This means that core inflation may further decline in the coming months."

At a press conference held this week, Sanna Marin stated that tackling inflation is her top priority. The government she leads is formulating a comprehensive economic plan to mitigate the impact of inflation on households and businesses. She is expected to deliver a policy speech in Parliament later on Friday to further clarify this governance intention.

Sanna Marin's sense of urgency stems from the fact that high inflation over the years was a major reason for her ruling party, the Liberal Democratic Party, losing its majority in both houses during the last two national elections.

Meanwhile, Kazuo Ueda remains cautious about raising borrowing costs, emphasizing that the current potential inflation rate is still below the 2% target level.

The latest survey shows that due to Sanna Marin's previous stance leaning towards supporting monetary easing, 90% of Bank of Japan observers expect that the central bank will not raise interest rates when it announces its next policy decision on October 30. December is the most recognized time for a rate hike, with half of the respondents expecting action to be taken then.

Saito stated: "The Bank of Japan may wish to raise interest rates in December or early next year. However, in light of Sanna Marin's policy inclination and the trend of slowing inflation, the central bank may face greater challenges in advancing rate hikes in the future."

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