BOJ Hike Odds Rise as Japan's Wholesale Inflation Stays Hot

Japan's wholesale inflation remained elevated in July, rising 7.2 percent year-over-year, according to data released by the Bank of Japan (BOJ). This increase was slower than market forecasts but still near the 7.3 percent spike seen in June.

The producer price index edged up 0.1 percent on a month-on-month basis in July, after a revised 0.5 percent increase in June, the data showed. The BOJ kept policy steady last month but warned that underlying inflation could exceed its target due to mounting price pressures, signaling a strong chance of a September rate hike.

Analysts predict another rate increase at the next BOJ meeting on September 17-18, with some forecasting a move to 1.25 percent from 1 percent. The rising wholesale price impulse could lead to broad-based increases in consumer inflation, which has stayed below the BOJ's 2 percent target due to government subsidies aimed at curbing fuel costs.