Japanese Inflation Rises in July, BOJ Rate Hike Looms

Japan's consumer price index (CPI) rose in July, with core inflation also increasing but remaining below the Bank of Japan's annual target.

The core reading, which excludes volatile fresh food prices and energy costs, grew 1.8% year-on-year in July, in line with expectations and up from 1.6% in the prior month.

Meanwhile, producer price index (PPI) surged to an over three-year high in July, data showed last week, as Japanese businesses passed on higher energy and raw material costs to consumers.

The BOJ is expected to hike interest rates further, with Capital Economics analysts predicting a rate of 2% by end-2027.