Reference Message Network reported on June 21st according to a report by Agence France-Presse on June 20th. Official data on the 20th showed that Japan's core inflation rate accelerated to 3.7% in May, posing a threat to Prime Minister Shoichi Maehara's leadership ahead of the July upper house election.

Despite the release of emergency rice reserves by the Japanese government, rice prices were more than double what they were a year ago.

Japan is scheduled to hold an upper house election next month. At that time, public dissatisfaction with inflation may deal a blow to the Liberal Democratic Party, which is led by Shoichi Maehara.

Data released on the 20th showed that even excluding the volatile prices of fresh food, the inflation rate in May still exceeded market expectations and was higher than the year-on-year inflation rate in April (3.5%).

The prices of various food items have risen, including non-fresh food items such as coffee and chocolate.

Electricity prices increased by 11.3%, and gas prices increased by 5.4%.

Shoichi Maehara has promised to distribute 20,000 Japanese yen (approximately $139) in cash to each citizen before the upper house election in July - doubling the amount given to children - to help Japanese families cope with inflation.

This election is crucial for Shoichi Maehara because his government's public support has fallen to its lowest level since he took office in October last year. Observers said that one of the reasons for this result is the aggravation of inflation and the sharp rise in rice prices.

Supply chain disruptions have led to a shortage of rice, meaning that rice prices in May increased by 101% year-on-year, higher than the astonishing 98% increase in April.

In February this year, the Japanese government announced the release of rice stockpiles in an attempt to lower rice prices. Previously, the Japanese government only did this during disasters.

There are multiple factors contributing to the rice shortage, including extremely hot and dry weather two summers ago, which caused a decrease in national rice production.

Experts say that since then, some traders have been hoarding rice.

Last year, the Japanese government warned of the possibility of a "major earthquake" (which did not happen). This triggered panic buying, further exacerbating the problem of rising rice prices.

Looking ahead, U.S. tariff policies are expected to put pressure on Japanese companies. Economists predict that Japan's economy will slow down in the future.

The increasingly intense conflict between Iran and Israel is also putting greater upward pressure on energy prices, further posing risks to Japan's economy.

Earlier this week, the Bank of Japan announced that it would keep interest rates unchanged. The bank also said it would slow down the pace of reducing Treasury purchases because trade uncertainty could put pressure on the world's fourth-largest economy.

(Translated by Pan Xiaoyan)

Original article: https://www.toutiao.com/article/7518319811794682383/

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