Japan CPI slows to 1.5% in Jan on food, energy base effects

• Lyla Velez
• February 20, 2026
• News
• 0 Comments

Key Points:

• Inflation cooled to 1.5% in January 2026, lowest since March 2022.
• Rate slipped below BOJ’s 2% target, ending a 45‑month streak.
• Cooling driven by waning cost‑push pressures; food inflation eased to 3.9%.

Japan’s annual inflation eased to 1.5% in January 2026, the lowest since March 2022, according to TradingView. The cooldown followed December’s 2.1%, with food inflation falling to a 15‑month low of 3.9%.

The 1.5% print slipped below the central bank’s 2% target and ended a 45‑month run above that threshold, as reported by CNBC. The trajectory points to waning cost‑push pressures cooling headline CPI.

Below BOJ’s 2% target: immediate policy takeaways

With headline and core measures easing, near‑term pressure on the central bank to tighten has diminished, according to Investing.com. Policy focus shifts to underlying inflation and wage outcomes rather than one‑off cost shocks.

Officials have repeatedly framed normalization as contingent on durable, wage‑led price gains rather than imported energy or food spikes. ‘We maintain accommodative policy until it is clear inflation is not predominantly driven by temporary or external factors,’ said Kazuo Ueda, Governor of the Bank of Japan.

Market forecasters broadly expect patience. Analysts at Brown Brothers Harriman said the softer 1.5% print supports a cautious stance now, while leaving room to tighten later if wage and price momentum firm, per VT Markets.

Kazuo Ueda’s stance: patience until inflation is wage-led

The governor’s reaction function centers on inflation that is stable, sustainable, and credibly anchored by wage growth. In this framework, cost‑push relief alone is insufficient to meet the 2% goal on a lasting basis.

Government messaging aligns with this emphasis on pay. ‘I strongly hope the central bank achieves wage‑driven inflation,’ said Prime Minister Sanae Takaichi, underscoring concern about price gains led mainly by food costs.

Near‑term watchpoints include spring wage negotiations, core‑core readings, and the next policy meeting. At the time of this writing, Bitcoin traded near $67,318, offering a neutral backdrop across risk assets.