Full Breakdown
Japan’s Wholesale Inflation Remains Elevated, Keeping Rate-Hike Prospects Alive
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Core Event
On October 13, Japan’s corporate goods price index rose 6.8% year-on-year to September, a slowdown from August’s 7.6% gain but still well above the median market forecast. The same data showed the yen-based import price index jumping 24.5% in September from a year earlier, underscoring the impact of a weak yen on raw-material costs.
Data & Statistics
- Wholesale price index: +6.8% YoY (year to September).
- Import price index: +24.5% YoY in September.
- Sectoral moves: chemical goods +13.3%, plastic products +12.8%, non-ferrous metals +40.2%; farm products fell -13.3%, driven by rice price declines.
- Household inflation expectations (BOJ survey): 86.5% expect prices to rise in five years (up from 86.1%); one-year ahead expectations eased to 11.8% from 13.1%, and five-year expectations to 10.1% from 10.8%.
Official Statements & Responses
He added that the pace and timing of future rate hikes will depend on whether wholesale-price pressures translate into broader consumer-price inflation and affect consumption. A separate BOJ household-expectations survey highlighted that while price-rise expectations remain high, the projected pace has moderated.
Verbatim Quotes
- “Wholesale inflation will likely re-accelerate given strong uncertainty over the Middle East conflict, which is keeping crude oil prices elevated,” — Masato Koike, a senior economist at Sompo Institute Plus
What’s Next
The Bank of Japan is scheduled to release fresh quarterly growth and inflation forecasts at its October 29-30 meeting. Market participants will watch those projections for clues about the timing of the next possible rate increase.