Japan’s wholesale inflation remained elevated in July, strengthening expectations that the Bank of Japan (BOJ) could raise interest rates as early as September.
The producer price index rose 7.2% year-on-year in July, easing only slightly from a revised 7.3% increase in June, according to BOJ data. The reading was below the 7.4% rise forecast by economists.
The latest figures come as the BOJ adopts a more hawkish tone on inflation. At its July meeting, some policymakers called for a faster pace of rate hikes to address rising price risks.
Import costs also remained a major source of pressure. The yen-based import price index climbed 29.1% in July from a year earlier, although this was slower than the revised 30.1% increase recorded in June, reflecting the impact of a weaker yen on import costs.
On a monthly basis, the producer price index edged up 0.1% in July, following a revised 0.5% increase in June.
The BOJ kept its monetary policy unchanged last month but warned for the first time that underlying inflation could exceed its target. It also said future discussions would focus on upside risks to prices, reinforcing expectations that a rate hike could come as soon as September.
Reuters
