No interest rate hikes: Japan's July wholesale inflation slows for seventh month
Business
Rate had peaked at 10.6pc in December
TOKYO (Reuters/Web Desk) – Japanese wholesale inflation slowed in July year-on-year, easing for a seventh straight month due to softer energy utility costs, central bank data showed on Thursday, a sign the pressures that drove up consumer prices are running their course.
The 3.6 per cent rise in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, compares with the median market forecast for a 3.5pc annual increase and follows a 4.3pc annual increase in June.
Interestingly, the development comes as the Bank of Japan has acted against the advice and practice of top institutions – IMF, US Fed, Bank of England and European Central Bank – and experts by maintaining a loose monetary policy - meaning it avoided interest rates hikes.
After peaking at 10.6pc in December, wholesale inflation has slowed for seven months in a row, the data showed.
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The data underscores the Bank of Japan's view that consumer inflation will slow in coming months as global commodity prices slide from last year's peak levels.
For July, government subsidies to mitigate the impact of the spike in households’ gas and electricity utility fees, which shaved 0.6 percentage points off the overall increase, helped curb price hikes, the data showed.
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Yen-based import prices fell 14.1pc in July from a year earlier, falling for a fourth straight month, easing concerns about elevated import bills for companies reliant on raw material imports.
