Japan overtakes U.S. in inflation, but wage growth lags

Service-sector pay raises are key to Tokyo's goal of a virtuous cycle

Goods remain the main driver of inflation in Japan as companies pass on higher materials and energy costs to consumers. (Photo by Makoto Okada)

YOHEI HIROSE, Nikkei staff writer

July 22, 2023 02:02 JST

TOKYO -- Consumer prices grew faster in Japan than in the U.S. for the first time in nearly eight years last month, but slower gains in pay remain an obstacle to the Japanese government's goal of beating deflation.

Official Japanese data released Friday showed the consumer price index including fresh food rising 3.3% on the year in June, compared with a 3% increase in the U.S.