Japan Wholesale Inflation Hits 6.3% in May as Energy Shock Bolsters BOJ Rate-Hike Case
Updated
Updated · Reuters · Jun 10
Japan Wholesale Inflation Hits 6.3% in May as Energy Shock Bolsters BOJ Rate-Hike Case
3 articles · Updated · Reuters · Jun 10
Summary
Japan’s producer price index rose 6.3% year on year in May, topping the 5.5% forecast and marking the fastest wholesale inflation since March 2023.
Energy costs drove the surge after the effective closure of the Strait of Hormuz lifted crude and naphtha prices, while the weak yen pushed the import price index up 25.5%.
That broadening pressure is strengthening expectations for a Bank of Japan hike next week, with markets nearly fully pricing a move in the short-term policy rate to 1% from 0.75%.
Companies are already passing on more costs: over 80% of firms in a Tokyo Shoko Research survey reported war-related business damage, and food and beverage makers plan July price hikes on 2,269 items.