Japan's Corporate Goods Prices Continue to Rise Amid Inflation Concerns

Japan's corporate goods prices continued to rise in July, increasing by 7.2% year-over-year, according to data released by the Bank of Japan (BOJ). This marks a slight slowdown from June's revised 7.3%, but still remains at an elevated pace.

The producer price index for Japanese firms rose 0.1% in July after an upward revision to 0.5% in the previous month's result. The increase was led by oil and coal products, chemical products, and non-ferrous metals.

The BOJ may consider additional interest rate hikes to contain inflation risks, as Governor Kazuo Ueda signaled last month that the next move could come as early as September. This would be in response to upside risks for inflation and the possibility of an accelerated pace of rate action.

The data adds to signs that companies are facing high pressure to pass cost increases on to customers. In the first half of this year, 556 companies went bankrupt due to their inability to do so, marking the highest number of inflation-related bankruptcies for a half-year period since records began in 2018.