Core inflation, which excludes fresh food but includes energy, rose 1.8%, in line with expectations. Wholesale inflation also surged to 7.2% in July, with electricity charges being the largest contributor. Energy prices increased for the first time since November 2025 despite government subsidies. The Bank of Japan previously warned that core inflation is likely to accelerate above 2% from the second half of its 2026 fiscal year, citing wage increases, rising crude oil prices, and yen depreciation.