Japanese ‘wholesale’ inflation levels eased back a little in August:
The main drivers were lower commodity prices, falling utility prices, and the appreciation of the Japanese yen.
Details showed that import prices dropped significantly
- falling to 2.6% YoY from 10.8% in July
While consumer price inflation is expected to temporarily rise to 3.0% YoY in August (the data is due late next week), it is projected to decline again from September, aided by the restart of Japan’s energy subsidy program.
The slowdown in wholesale prices gives, at the amrgin, the Bank of Japan (BoJ) time to assess financial market conditions, but if economic growth, particularly consumption, improves, the BoJ may resume rate hikes as soon as December. That’s what two BoJ officials have reiterated yesterday and today:
