<p>Since the outbreak of the COVID-19 pandemic, domestic prices in Japan have changed substantially. During the same period, exchange rates, import prices, and commodity prices also fluctuated widely worldwide. This study examines the pass-through of these external prices to domestic prices in Japan and investigates how it depends on the state of inflation. Using an exponential smooth transition autoregressive model that incorporates past inflation rates, we find significant nonlinearities in pass-through. The results show that the pass-through of import prices measured in domestic currency increases when past inflation deviates substantially from zero, both in Japan and in the United States. These findings highlight the importance of the inflation environment in explaining changes in pass-through during the post-pandemic period. We further show that pass-through has remained relatively high and highly responsive to past inflation in the United States. In contrast, pass-through in Japan remains relatively low and less sensitive to inflation, even during periods of elevated inflation. This suggests that import-price shocks may have more limited effects on domestic prices in Japan because of greater price stickiness. Finally, we examine the contributions of exchange rates and contract-currency import prices (or Japan-specific commodity prices) to domestic-currency import-price pass-through. The results indicate that contract-currency import prices play a more important role than exchange rates in explaining domestic price changes in Japan.</p>