TOKYO :Japan’s annual wholesale inflation slowed in August as the yen’s rebound weighed on import costs, data showed on Thursday, taking some pressure off the central bank to address upward price risks with near-term interest rate hikes.
The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 2.5 per cent in August from a year earlier, Bank of Japan (BOJ) data showed, slowing from a 3.0 per cent gain in July. It fell short of market forecasts for a 2.8 per cent increase.
The Japanese currency’s sharp rise during the month weighed on the yen-based import price index, which rose by just 2.6 per cent in the year to August after a 10.8 per cent spike in July, the data showed.
On a month-on-month basis, wholesale prices fell 0.2 per cent in August. The yen-based import price index also dropped 6.1 per cent in August from the previous month.
The slowdown in wholesale inflation, which will affect the broader consumer price data in coming months, may influence the timing of the BOJ’s next interest rate hike.
The BOJ ended negative interest rates in March and hiked short-term borrowing costs to 0.25 per cent in July on the view Japan was making steady progress towards durably achieving its 2 per cent inflation target.
BOJ Governor Kazuo Ueda cited the risk of an inflation overshoot from rising import costs as among factors that led to the bank’s decision to hike rates in July.
He has also signaled the BOJ’s readiness to raise rates again if consumer inflation remains on track to hit 2 per cent in coming years backed by solid wage gains, as the board projects.
From: channelnewsasia
Business News
