Japan's Corporate Goods Prices Hit Record High as Import Costs Surge

Japan’s wholesale inflation accelerated in June, driven by a weakening yen that increased import costs, rising global commodity prices, and the phasing out of fuel subsidies. The corporate goods price index rose 2.9% year-on-year, reaching a record high for the seventh consecutive month. This data, along with a 9.5% increase in the yen-based import price index, suggests growing inflationary pressures that could influence the Bank of Japan’s decision on interest rates at its upcoming policy meeting. Economists anticipate that these trends, particularly the yen’s decline, may lead to further inflation acceleration towards autumn, potentially prompting the BOJ to consider rate hikes as it continues to normalize its monetary policy following the end of negative interest rates in March.