Inflation in Japan slowed to 2.7 percent in August due partly to government energy subsidies, official data showed Friday, with the cost of rice easing following a huge price spike.

Inflation continues to be driven by rice prices, which increased by 68.8 percent year-on-year in August after surges of around 100 percent in June and 90.7 percent in July.

Voters angry about rising rice costs have deserted the long-dominant ruling Liberal Democratic Party, and this month an under-pressure Prime Minister Shigeru Ishiba announced he would step down after his coalition lost its majority in both chambers.

Rice prices have skyrocketed because of supply problems linked to a very hot summer in 2023 and panic-buying after a “megaquake” warning last year, amongst other factors.

The core inflation r

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