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HomeWorld newsJapanese wholesale inflation rose in May, complicating the BOJ's interest rate outlook

Japanese wholesale inflation rose in May, complicating the BOJ’s interest rate outlook

Japanese wholesale inflation rose at the fastest annual pace in nine months in May, data showed on Wednesday. This was a sign that the weak yen was putting upward pressure on prices by pushing up the cost of importing raw materials.

The data complicates the Bank of Japan’s decision on how quickly to raise rates, as price increases due to cost pressures could cool consumption and dampen its chances of achieving the kind of demand-driven inflation it wants to see before further stimulus measures are being phased out, analysts say. participation.

“Consumer inflation may not slow down much as wholesale price growth accelerates again and energy prices rise sharply heading into the summer” as government subsidies to curb energy bills end in June, said Takeshi Minami, chief economist at Norinchukin Research. “But the BOJ will have to wait for wages to rise and help consumption recover” before raising rates again, he added.

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