Headline Japanese inflation eased to 2.0% year on year in December, below expectations (vs 2.7% in November, 2.3% market consensus), mainly due to renewed energy subsidies, stable rice prices, and low petroleum costs. These factors are expected to keep inflation low into 2026, as the government increases winter energy subsidies, oil prices remain weak, and rice prices continue to fall. Thus, headline inflation is expected to drop below 2% in the coming months. Meanwhile, core inflation, excluding fresh food and energy prices, slowed to 2.6% (vs 2.8% in November, market consensus). Goods prices declined while private ... (full story)