BOJ on Brink of Rate Hike as Wholesale Inflation Rises Again

Japan's wholesale inflation remained elevated in August, according to data released on Friday. The producer price index rose 7.6% year-over-year, exceeding the median market forecast of a 7.4% increase. This follows a revised 7.7% gain in July.

The yen-based import price index increased by 24.8% in August from a year ago, after a revised 29.3% surge in July. The data points to the ongoing impact of the weak yen on import costs and broader inflation.

BOJ Governor Kazuo Ueda has emphasized that the central bank is closely monitoring wholesale inflation for signs of firms passing on costs to households.

The BOJ raised interest rates to 1% in June, with analysts expecting another hike to 1.25% next week and potentially to 1.75% by the second quarter of 2027.