Japan’s June consumer inflation rebounds, paving the way for further rate hikes

Glonghui July 24｜Japan's consumer inflation in June accelerated slightly, paving the way for further interest rate hikes by the country's central bank. Government data released on Friday showed that Japan's core consumer price index, excluding fresh food, rose by 1.6% in June, higher than May's 1.4%. This figure matches the average expectation from economist surveys. Economists stated that oil prices and food costs remain key factors affecting overall price trends. They also noted that these prices may continue to be influenced by multiple intertwined factors, including the Middle East situation, a weak yen, government energy subsidies, rising packaging costs, and planned food sales tax reduction measures. Last month, the Bank of Japan raised its policy interest rate to 1%, the highest in 31 years. This move was driven by increased concerns within the Policy Board that rising oil prices would push Japan's underlying inflation rate above the bank's 2% target. Policymakers at the Bank of Japan have indicated that the impact of the Middle East conflict and the subsequent surge in oil prices may start to become evident in the summer. The central bank is scheduled to release its latest economic growth and inflation forecasts alongside its interest rate decision next week.