Rise in Japan's inflation to 2-year high in April puts more pressure on government

Friday's inflation data in Japan raised market concerns, casting doubt on the government's efforts to slow consumer price growth. According to Bloomberg, the key index reached a two-year high in April. Particularly worrisome was a surge in the cost of rice. Over the month, its price rose by more than 98%. The last time such an increase was witnessed in 1971, the agency notes.

The inflation index, which excludes the cost of fresh food, increased by 3.5% in April. The March figure was at 3.2%. Food and energy pushed consumer prices in Japan to even higher levels. The cost of the latter increased by 9.3% in April due to the phaseout of government subsidies for gas and electricity.

Aiming to stabilize inflation rates, Japanese authorities are considering restarting support in June. They also plan to introduce some measures to reduce gasoline prices. Yet, despite their attempts to improve the situation, Prime Minister Shigeru Ishiba's rating is rapidly falling down. Meanwhile, Japan will hold elections in July, which puts his chances of winning at risk, the agency reports.