Japan wholesale inflation accelerates, keeps alive rate hike view
TLT•Japan’s wholesale prices rose 7.1% year over year in October, above the 6.5% forecast, keeping market expectations of a near-term interest rate hike alive.
1. Wholesale prices accelerate
Japan’s corporate goods price index rose 7.1% in the year to October, compared with a median forecast of 6.5% and a 6.8% increase in September. The Bank of Japan said firms continued passing on higher labour and raw material costs, as well as increased oil and chemical prices.
2. Rate decision in focus
The data will be among the factors the BOJ scrutinises at its December 17-18 policy meeting. Many analysts expect the central bank to raise its policy rate to 1.5% from 1.25%, though economist Masato Koike said the BOJ could hold if markets remain volatile. Petroleum and coal prices rose 15.9% year over year, chemical prices increased 15.5%, and the yen-based import price index rose 24.8%.
