By Kentaro Sugiyama and Makiko Yamazaki
TOKYO- Japan’s wholesale inflation accelerated in July, with the pace of year-on-year growth the fastest in 11 months, data showed on Tuesday, as a weak yen pushed up commodity import bills that were already high.
The corporate goods price index (CGPI), which measures the price companies charge each other for goods and services, rose 3 percent in July from a year earlier, Bank of Japan data showed, matching a median market forecast.
The index, at 123.1, hit a record high for the eighth straight month. It accelerated from June’s 2.9 percent increase.
Inflation data will be scrutinized by the central bank, which raised interest rates on July 31 to levels unseen in 15 years and signaled its readiness to hike borrowing costs further.
The yen-based import price index climbed 10.8 percent in July from a year earlier, accelerating from a revised 10.6 percent rise in June, and reflecting the yen’s weakness and rising raw materials prices.
Japan’s parliament will hold a special session on Aug. 23 to discuss the central bank’s decision last month to raise interest rates, a government source said on Tuesday.
The lower house financial affairs committee plans to request Bank of Japan Governor Kazuo Ueda to participate in the session, according to the source, who declined to be identified.
The schedule will be officially decided later on Tuesday.
The BOJ surprised markets by raising interest rates to a 15-year high on July 31 and signalling its readiness to hike borrowing costs further on growing prospects that inflation will durably hit its 2 percent target.
The decision, coupled with US recession fears, roiled financial markets, triggering the Nikkei benchmark’s biggest selloff since the 1987 Black Monday crash.
The market rout led senior officials from the ruling and major opposition parties to agree to summon Ueda to explain the central bank’s decision.
Japan’s economy likely rebounded in the April-June period after shrinking in the previous quarter thanks to a pick-up in factory output and consumption, a Reuters poll showed, helping the central bank make the case for further interest rate hikes.
But the yen’s recent rally and signs of slowdown in the U.S. economy may emerge as fresh risks to the export-reliant economy, some analysts say.
Japan’s real gross domestic product (GDP) is expected to have expanded an annualised 2.1 percent in April-June, according to a median forecast of economists polled by Reuters, rebounding from a 2.9 percent contraction in the previous quarter.
Private consumption likely rose 0.5 percent, marking the first increase in five quarters, as bumper pay hikes offered by companies in spring wage negotiations begin to boost household income, the poll showed. – Reuters
