BOJ Signals Rate Hike as Soon as September Amid Persistent Inflation
Japan's producer prices remain persistently elevated, with the July Corporate Goods Price Index (PPI) rising 7.2% year-on-year, staying above the 7% threshold for multiple consecutive months.
The data released by the Bank of Japan (BOJ) shows that the increase was driven primarily by three major categories: petroleum and coal products, chemical products, and non-ferrous metals.
The yen-denominated import price index surged 29.1% year-on-year in July, underscoring how yen weakness is amplifying imported inflation.
The rising input costs are posing a material threat to the viability of some businesses, with 556 companies going bankrupt in the first half due to their inability to pass on rising costs.
BOJ Governor Kazuo Ueda has signaled that if upside inflation risks persist, the next rate hike could come as early as September.