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Japan July core inflation seen at 1.8% on higher energy and food costs

Created at 14 Aug · 2:59 AM1 source↑ Market-relevant
IN SHORT

Japan's core consumer inflation is expected to accelerate to 1.8% in July, driven by rising food prices and energy costs. This data could reinforce expectations of a Bank of Japan interest rate hike in September.

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Key Numbers

1.8%Japan July core inflation forecast
1.6%Japan June core inflation
7.2%Japan July wholesale inflation
2%BOJ inflation target
31-year highBOJ June rate hike level

Who's Involved

Ryosuke Katagi
market economist at Mizuho Securities
Bank of Japan
central bank expected to hike rates
Japan July core inflation seen at 1.8% on higher energy and food costs

↳ Why This Matters

The anticipated rise in Japan's core inflation could signal persistent price pressures, potentially prompting the Bank of Japan to tighten monetary policy further, which would have significant implications for the yen and global financial markets.

Key facts

  • Japan's core consumer inflation is projected to reach 1.8% in July.
  • This marks an acceleration from 1.6% in June.
  • Higher food prices and energy costs are contributing factors.
  • Annual wholesale inflation was 7.2% in July.
  • Market expectations point to a potential Bank of Japan rate hike in September.

    • Japan's core consumer inflation is anticipated to have accelerated in July, reaching an estimated 1.8% year-on-year, according to a Reuters poll of economists. This marks a second consecutive month of acceleration, up from 1.6% in June, driven by faster food price gains and increased energy costs, partly influenced by the situation in the Middle East.

    Wholesale inflation also remained elevated at 7.2% in July, indicating broadening price pressures across the economy. These inflation concerns, coupled with recent joint Japanese-U.S. efforts to support the yen, are fueling market expectations that the Bank of Japan may implement another interest rate hike as early as September. The central bank had previously raised rates to a 31-year high in June.

    The official consumer price index data is scheduled for release by the internal affairs ministry on Friday, August 21.

    Frequently asked questions

    Japan's core consumer inflation is expected to rise 1.8% year-on-year in July.

    Faster food price gains and cost pressures on energy from the war in the Middle East are pushing prices higher.

    The Bank of Japan's inflation target is 2%.

    The internal affairs ministry will announce the CPI data at 8:30 a.m. on Friday, August 21.

    What Happens Next

    01The internal affairs ministry will announce CPI data on August 21.

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    Cadence
    CME Headlines
    • Treasury futures gain as yields react to flat July PPI data.
      13 Aug · 9:18 PM
    • Treasury futures gain as yields react to flat July PPI data.
      13 Aug · 9:18 PM
    • BrokerTec Markets on CME Globex Notice: August 10, 2026
      13 Aug · 2:15 PM

    How It Developed

    Japan's core consumer inflation likely accelerated in July.
    Faster food price gains and energy cost pressures are cited as reasons.
    The nationwide core consumer price index is expected to rise 1.8% year-on-year in July.
    This acceleration follows a 1.6% rise in June.
    Wholesale inflation remained elevated at 7.2% year-on-year in July.
    Joint Japanese-U.S. efforts to support the yen have increased bets on a Bank of Japan rate hike.
    The Bank of Japan raised interest rates to a 31-year high in June.

    Sources

    T1
    Japan's July core inflation seen at 1.8% on higher energy costsReuters

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