Japan's wholesale inflation stood at 7.6% in August — Channel NewsAsia
In Japan, the producer price index rose by 7.6% year-on-year in August, exceeding the market median forecast of 7.4%. Data from the Bank of Japan, reported by Channel NewsAsia, indicated that wholesale inflation remained high ahead of the central bank's next meeting.
Producer price dynamics
In July, the indicator rose by 7.7% year-on-year, according to revised data. At the same time, in August the producer price index fell by 0.2% from the previous month, following revised growth of 0.4% in July.
The yen-based import price index increased by 24.8% in August compared with the same month last year. In July, it rose by 29.3%, according to revised data. The report notes that the weakening of the yen during the month increased import costs and intensified broader inflationary pressure.
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Interest rate expectations
Rising fuel costs due to the conflict in the Middle East and more expensive imports amid a weak yen added price pressure to Japan's economy. Bank of Japan Governor Kazuo Ueda has said that the regulator is closely monitoring wholesale inflation, assessing the extent to which companies can pass costs on to households.
In June, the Bank of Japan raised its interest rate to 1%, the highest level in 31 years, as it believed the country was nearing a sustainable achievement of its 2% inflation target. In July, the regulator left the rate unchanged but indicated a high likelihood of raising it soon. Analysts surveyed by Reuters expect the rate to be raised to 1.25% next week and to 1.75% in the second quarter of 2027.
