Japan August imports jump as oil prices lift costs, exports stay firm

The trade figures underscore how higher energy prices are swelling import bills and fuelling inflationary pressures, reinforcing expectations the Bank of Japan will raise interest rates at the end of its two-day policy meeting on Friday.

Higher import costs, combined with solid exports and rising wages, could strengthen the case for additional rate hikes in the months ahead after a widely expected 25-basis-point hike on Friday, analysts said.

The BOJ may signal a faster pace of future rate hikes should price pressures heighten the risk of inflation overshooting its forecasts, sources familiar with its thinking have said.

Japan's economy has remained resilient despite the supply chain disruptions, with revised data last week showing growth in the April-June quarter was stronger than initially estimated, supported by business spending that proved more robust than previously reported.