TradingKey - Japanese rice prices are climbing at an alarming rate. As of the end of April 2025, the average retail price of 5 kg of rice reached 4,233 yen, equivalent to about 29.3 US dollars per kilogram.

Extreme heat has reduced rice production in 2023, coupled with the depreciation of the yen, which has pushed up import costs, and hoarding by farmers and wholesalers has exacerbated the imbalance between supply and demand.

In order to curb the sharp rise in rice prices, the Japanese government released government reserves of rice in February. This is the first release of reserves aimed at stabilizing the market, and it is planned to sell them to major acquirers through tenders, and set buyback conditions within one year to prevent prices from plummeting.

For the week ended May 4, the price of a 5-kilogram bag of vegetables was 4,214 yen, or about $28.5, down 19 yen from the previous week.

The soaring price of rice has become an "amplifier" of inflation in Japan. When the Bank of Japan raised interest rates to 0.5% in January, it explicitly mentioned the rising cost of food as an important basis for raising inflation expectations.

The BOJ Vice President warned that interest rate hikes will continue if the inflation target remains at 2%. At present, the core CPI has exceeded 2% for many consecutive months, and the market expects to raise interest rates twice more to more than 1% this year.

Follow-up events:

The third round of tariff talks between Japan and the United States is scheduled to be held on the 23rd, and it will be interesting to see whether the meeting will produce practical results.

The outcome of this tariff agreement will affect Japan's interest rate decision on June 17.

Find out more