Japan's core inflation cooled to 3.3% in June, coming down from a 29-month high of 3.7% as rice inflation showed signs of easing. The figure — which strips out costs for fresh food — was in line with the 3.3% expected by economists polled by Reuters. Headline inflation in the country dropped to 3.3%, coming down from 3.5% in May.

Japan’s consumer inflation eased in June, a welcome development for central-bank policymakers whose hands are tied by uncertainty about the trade outlook.

Critics of President Trump's tariff policies have been waiting for the import taxes to raise the inflation rate. That effect may be beginning.

The figure for June marks the fastest rate of inflation, which measures how quickly prices are rising, since January 2024.

A fresh report on Tuesday marked two consecutive months of rising inflation. Consumer prices rose 2.7% in June compared to a year ago, marking a notable surge of price increases as President Donald Trump's tariff policy took hold and some retailers warned they may pass some of the tax burden onto shoppers.

The Bureau of Labor Statistics reported that the consumer price index (CPI), a popular inflation gauge, increased in June to 2.7% on an annual basis as prices rose for consumers.

The report on producer prices adds to a mixed picture for inflation as the economy adjusts to the imposition of import tariffs.

Former Treasury Secretary Lawrence Summers warned that President Donald Trump’s bid to assert control over the Federal Reserve and drive down interest rates could trigger a surge in inflation expectations that pushes up long-term borrowing costs.