Japan's Inflation Picks Up in June, But Energy Costs Show Slippage
Japan's core consumer prices in June rose to 1.6% from a year earlier, surpassing May's rate of 1.4%. The increase is attributed to food costs, which jumped 3.1% due to higher raw material prices. Bento lunch boxes and chocolates saw significant price hikes as a result.
Energy costs, on the other hand, decreased by 0.1%, mainly due to government subsidies for fuel bills, which offset the impact of rising oil prices. Medical fees also increased following a revision in the medical fee system.
The Bank of Japan (BOJ) is set to assess these inflationary pressures ahead of its policy meeting next week, where it's expected to maintain the 1% interest rate. BOJ will also release fresh outlooks for prices and economic growth, focusing on how Middle East tensions might impact global supply chains.
Some experts believe that inflation may surpass 2% from autumn onwards due to renewed tensions in the Middle East. This could lead to further interest rate hikes by the end of this year, as signaled by the BOJ's intentions.