BOJ Rate Hike Odds Soar on Sticking Wholesale Inflation
Japan's wholesale inflation continued its upward trend in July, reaching 7.2% year-over-year, according to data released by the Bank of Japan (BOJ). This is slower than market forecasts, but still near the 7.3% spike seen in June.
The producer price index edged up 0.1% on a month-on-month basis, after a revised 0.5% increase in June. The data showed that strong demand tied to the AI boom and elevated global metal prices continue to drive price gains across various goods.
Nonferrous metals prices surged 40.6% year-over-year, while chemical products rose 12.9%. The yen-based import price index increased 29.1% in July from a year earlier.
Masato Koike, senior economist at Sompo Institute Plus, said that wholesale inflation is expected to re-accelerate due to renewed tension in the Middle East pushing up crude oil prices, which will drive up energy and other goods costs.