Japan’s wholesale inflation keeps BOJ rate-hike expectations alive

what happened

According to Newsmetry API, Japan’s wholesale prices increased 6.8% in the year through September. Companies passed higher fuel and chemical costs on to customers, pointing to intensifying inflationary pressure and keeping market expectations of a near-term Bank of Japan rate increase alive.

The corporate goods price index, which tracks prices charged between companies for goods and services, rose less than the market’s median forecast of 7.6%. It had advanced 7.6% in August. The yen-based import price index jumped 24.5% from a year earlier in September, BOJ data showed, indicating that the weaker currency continued to raise the cost of imported raw materials.

The Bank of Japan will consider the figures alongside other factors as its board prepares updated quarterly growth and inflation projections at this month’s policy meeting. The release keeps the market focused on the BOJ’s rate path and on how currency movements are feeding into domestic prices.

why it matters

The firm wholesale-price increase matters for the yen and Japanese government bonds because markets are still assessing the possibility of an imminent BOJ rate hike. Higher import costs remain another source of inflation pressure.

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