Core consumer prices in Tokyo, which are considered a leading indicator of Japanese price trends, rose 1.9% in April year-on-year, marking the fastest annual pace in seven years. This was as announced by the Ministry of Internal Affairs on May 6th.
The increase in inflation was driven mostly by rising energy costs and the waning effect of cellphone rate cuts. “Core” consumer prices exclude the price of fresh food. If both fresh food and energy costs are excluded, inflation in April came in at 0.8%.
In this post, we take a look behind the headline numbers and drill down on the main categories that are used to calculate the consumer price index (CPI). The CPI is comprised of ten main components:
- Food
- Housing
- Utilities (Electricity, gas, water)
- Furniture and House cleaning goods
- Clothing and footwear
- Healthcare
- Transportation and communications
- Education
- Culture and entertainment
- Miscellaneous expenses
Each category is weighted to calculate the overall CPI, with the top three, housing (27.6%), food (25.3%), and transportation and communications (10.1%) making up about 63% of the total.
Here is the breakdown of the inflation numbers by the ten main components:
Let’s drill down a little on the main categories.
Food
Overall food prices in April rose 0.7% versus March and 4.3% versus April 2021.
Fresh food prices rose 15.6% year-on-year, mainly due to the rise in prices of fresh fruit, vegetables, and seafood.
The cost of eating out only rose 1.5% compared to last April and the cost of liquor fell 0.5% year-on-year, the only component of the food category that decreased.
Housing
Tokyo housing prices rose 0.5% year-on-year in April and stayed flat compared to March. This was a relatively small increase compared to the increase in food prices.
In the table below, “imputed rent” is the rental price a homeowner would pay for a housing unit equivalent to the one they own.
However, it’s important to note that average sales prices for both newly constructed and pre-existing homes in the greater Tokyo are at record highs. For more on this, please see: Average sales price of a newly built apartment in Tokyo hits record high in 2021. For more on forecast price trends, please see: Tokyo apartment market forecast 2022
For more on average rent, please see Tokyo average rent and Japan average rent by prefecture
Transportation and Communication
Transportation and Communication was one of the main categories where prices fell year-on-year. The other was clothing.
Falling prices in this category have been caused by across-the-board cuts to mobile phone carrying charges, but this effect will start to have much less of an effect on the category as year-on-year rates fall to match the previous year’s price decreases.
Utilities
Rising energy prices have been been a mainstay of the news since the start of the war in Ukraine and every sub-category in this CPI component rose by double digit percentages, except water and sewage.
Utility prices overall rose 19.5% year-on-year in April but in the CPI calculation utilities are only weighted at 5.6% of the total CPI.
Source: Tokyo April 2022 CPI, Ministry of Internal Affairs and Communications (PDF in Japanese)
Lead photo: Tokyo, Japan – April 21, 2014: Sushi boxes in supermarket in Tokyo via iStock 469431786 Credit:BLUEXHAND
Bilingual Agents
All of the agents who list properties on realestate.co.jp are bilingual in Japanese and English. Some agents can also handle inquiries in Traditional Chinese, Simplified Chinese, and other languages. Please click on the links below to see their listings:
All For Sale Property Listings
FAQs About Buying Property in Japan
Can a foreigner buy property in Japan?
Yes. You can buy property in Japan regardless of your nationality or country of origin. There are also no residency requirements for buying real estate in Japan. Securing financing as a resident foreigner is more complicated. For info on financing, please see Basic Requirements for Getting a Mortgage as a Foreigner in Japan
Seminars on Buying Property in Japan
Please see our seminar page for a current list of seminars on: how to buy a home in Japan, investing in Japanese real estate for beginners, how to apply for permanent residency in Japan, how to sell property in Japan, and much more.
How do I get a property loan as a foreigner in Japan?
Please see this article for information on: Getting a property loan as a foreigner in Japan
What is the process for buying a property in Japan?
Please see our step-by-step guide: Guide to Buying Property in Japan
See how much you can borrow and your monthly payments in yen: Yen Mortgage Loan Calculator
For information about purchase and brokerage fees: Breakdown of real estate purchase fees and taxes in Japan
Need to Know
Leasehold rights in Japan: Advantages and disadvantages
Earthquake building codes and technology in Japan
Can I legally rent out my home in Japan on AirBnB?
Repair reserve fund fees explained
Parking spaces in Japanese condominium buildings explained
Building your own home in Japan
7 reasons why foreigners are interested in buy a home in Japan, especially now – March 2022 Update
Average price of an apartment in Japan by prefecture – 2022 Ranking
Bilingual Real Estate Agent in Tokyo Answers Your FAQs on Buying and Managing an Investment Property
How much is my property worth?
Real Estate Japan is pleased to offer free, no obligation appraisals for owners of property in Japan. Please click here and fill out the form: How much is my property worth?
7 situations when you should consider selling your investment property in Japan
What are the main factors affecting home sale prices in Japan in 2019?
Akiya Banks in Japan
- Akiya banks in Japan: Links to vacant house databases by prefecture
- How much does it cost to renovate an akiya in Japan
- What you should know before buying a vacant home in Japan
- What to do with Tokyo’s hundreds of thousands of vacant homes
- Government plans to turn Japan’s abandoned houses into semi-quasi public housing
- Akiya Bank Japan vacant house database to now include government public assets
- 7 trends & events that will shape Japan and the Japanese real estate market in 2019