Key facts
- Japan's wholesale prices rose 6.3% year-on-year in May.
- The Bank of Japan is signaling a potential June interest rate hike.
- Turkey's annual inflation rate reached 73.5% in May.
- US ISM Services Prices Index increased to 71.3 in May.
- US initial jobless claims rose to 225,000 for the week ended May 30.
- Philippines CPI inflation decelerated to 6.8% in May.
- Eurozone services PMI contracted for the third consecutive month, falling to 47.7 in May.
- Canada's Ivey PMI increased to 58.2 in May.
- Japan's real wages increased 1.9% year-on-year in April.
- Czech CPI inflation eased to 2.1% year-over-year in May.
- Norway's annual core inflation rate increased to 3.4% in May.
- Vietnam's CPI accelerated to 5.60% year-over-year in May.
Global inflation figures present a complex picture, with several economies experiencing accelerating price pressures while others report a deceleration. In Turkey, annual inflation surged to 73.5% in May, exceeding expectations and marking a continued climb, influenced by a global energy shock linked to the US-Israeli conflict involving Iran. Policymakers face an interest-rate decision next week.
Japan's wholesale prices rose 6.3% year-on-year in May, the fastest pace in three years, driven by energy and commodity costs. This acceleration, coupled with persistent yen weakness and expectations of a hawkish US Federal Reserve, increases pressure on the Bank of Japan (BOJ) to hike interest rates. Governor Kazuo Ueda signaled a pivot to inflation fighting, suggesting a June rate hike is likely, prioritizing inflation risks over economic activity concerns. Japan's real wages also increased 1.9% year-on-year in April, the fourth consecutive monthly gain, supporting the case for a BOJ rate hike.
In contrast, the Philippines saw its CPI inflation decelerate to 6.8% in May, down from 7.2% in April and below analyst forecasts, driven by slower price growth in transport, food, and housing. Similarly, the Czech Republic's CPI inflation eased to 2.1% year-over-year in May, below market expectations, with a broad-based slowdown impacting core inflation. Oman's annual inflation eased to 3.3% in April, primarily due to a slowdown in transportation costs, though food inflation accelerated.
Other regions show mixed trends. The US ISM Services Prices Index increased to 71.3 in May, indicating persistent cost pressures, although initial jobless claims rose more than expected to 225,000. The Eurozone services sector contracted for the third consecutive month, with input costs surging to their sharpest rate in three-and-a-half years, suggesting a potential 0.2% quarterly GDP decline. Canada's Ivey PMI rose to an 8-month high, with its adjusted prices index also increasing, signaling inflation pressures. Vietnam's CPI accelerated to 5.60% in May, driven by housing, food, energy, and transport costs. Indonesia's CPI inflation rose to 3.08% in May, primarily due to rising food prices. Brazil's IPCA-15 inflation increased to 4.64% in May, exceeding the central bank's target band. Norway's core inflation unexpectedly rose to 3.4% in May. Ghana's inflation rose to 3.7% in May, driven by food prices, though the central bank maintained its rate.