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[BUSINESS] · Japan · 17 sources

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Japan inflation rises to 1.9% in July, fueling rate hike expectations

Japan's inflation accelerated in July, with the headline Consumer Price Index (CPI) rising 1.9% year-on-year. This increase was driven by rising energy costs and food prices, including a 3.0% rise in items excluding fresh food. The core CPI, which excludes volatile fresh food prices, rose 1.8% year-on-year, marking its fifth consecutive month of growth.

Underlying inflation pressures are broadening, as the core-core CPI (excluding both fresh food and energy) climbed to 1.9%. This figure approaches the Bank of Japan's 2% target. Factors contributing to these price increases include a weak yen, which has raised import costs, and geopolitical tensions in the Middle East affecting energy supplies.

Economic data also shows strength in the private sector. S&P Global reported that Japan's composite PMI output index rose to 53.4 in August, the strongest growth since February. This combination of rising inflation and robust economic activity has strengthened market expectations that the Bank of Japan will raise interest rates, potentially from 1% to 1.25%, during its September meeting.

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Bank of Japan · Donald Trump · International Monetary Fund · Japan · Japan Statistics Bureau · Ministry of Internal Affairs and Communications · S&P Global · Sanae Takaichi

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