BOJ Data Fuels Japan Inflation Fears Amid Rate Hike Expectations

Japan's corporate services inflation has accelerated further in July, surpassing expectations. According to data released by the Bank of Japan on Wednesday, the corporate services price index rose 3.6% year-on-year, beating forecasts of a 3.2% gain.

The index measures prices that companies charge each other for services and has been increasing steadily in recent months. This latest print is particularly noteworthy as it comes after data showed Japanese consumer inflation also accelerated in July from a year earlier.

Companies have been passing on rising import costs, largely due to a weak yen and the ongoing conflict between the US and Iran, to consumers. While government subsidies have provided some protection for consumers, inflation has continued to rise steadily.