Japan Wholesale Inflation Accelerates in August

Reuters

11:43 JST, September 11, 2025

TOKYO, Sept 11 (Reuters) – Japan’s wholesale inflation accelerated in August on steady rises in food costs, data showed on Thursday, highlighting sticky inflationary pressure that may keep alive market expectations of a near-term interest rate hike.

The data, seen as a leading indicator of consumer prices, will likely be among factors that the Bank of Japan (BOJ) will scrutinize at its next policy meeting on September 18-19.

The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 2.7% in the year to August, matching market forecasts and accelerating from a revised 2.5% increase in July.

Food and beverage prices rose 5.0% in August from a year earlier, faster than a 4.7% gain in July, suggesting that stubbornly high food costs will keep inflation elevated.

Electricity, gas and water bills fell 2.9% year-on-year in August due in part to government subsidies to curb utility prices, the data showed.

An index measuring yen-based import prices fell 3.9% in August from the previous year, slower than a revised 10.3% drop in July, the data showed.

“Wholesale inflation is likely to stay above 2% for the time being on elevated prices of farm goods, food and beverages,” said Yutaro Suzuki, an economist at Daiwa Securities.

“But upward price pressure is gradually moderating” with yen rises seen pushing down import costs, he said.

The BOJ ended a decade-long, massive stimulus last year and raised interest rates to 0.5% in January on the view Japan was on the cusp of durably achieving its 2% inflation target.

While core consumer inflation has exceeded the BOJ’s target for well over three years, governor Kazuo Ueda has stressed the need to tread cautiously to scrutinize the scale of damage to the economy from U.S. tariffs.

In current forecasts made in July, the BOJ expects rises in rice and other food prices to gradually slow and, coupled with steady wage gains, underpin consumption and the broader economy.