Banking
Japan's wholesale inflation eases but import costs surge on weak yen
Producer prices rose 7.2% year-on-year in July, missing forecasts but keeping rate-hike pressure alive.
Reported from channelnewsasia.com→ — read the original alongside this account.
Japan's producer price index rose 7.2 per cent in July from a year earlier, Bank of Japan data showed on Thursday, as wholesale inflation continued to broaden despite a slight easing from the prior month.
The reading came in below market expectations of 7.4 per cent but above the June figure of 7.3 per cent (revised). On a month-on-month basis, the index rose 0.1 per cent in July, down from a revised 0.5 per cent the previous month.
The yen-based import price index jumped 29.1 per cent year-on-year in July, down from 30.1 per cent in June but still signalling significant upward pressure on domestic prices from currency weakness. A weaker yen makes foreign goods costlier for Japanese importers and consumers.
Rate hike pressure persists
The data reinforces market expectations of an interest rate increase in September. The BOJ held policy steady in July but warned for the first time that underlying inflation could exceed its target, a signal of a shift toward tightening.
At its July meeting, some BOJ policymakers called for speeding up the pace of rate hikes to combat inflation risks. The central bank said future discussions would focus on upside price risks, cementing the case for action within weeks.
– Reuters