Key facts
- Japan's wholesale prices rose 6.3% year-on-year in May.
- The Bank of Japan is considering a 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, an 8-month high.
- Japan's real wages increased 1.9% year-on-year in April.
- India's inflation likely climbed to 4.0% in May.
- Norway's annual core inflation rate increased to 3.4% in May.
- Ghana's annual inflation rate accelerated to 3.7% in May.
Global inflation data for May presents a varied landscape, with several economies grappling with rising price pressures while others experience a deceleration. Japan's wholesale prices saw a significant year-on-year increase of 6.3% in May, marking the fastest pace in three years and exceeding forecasts. This acceleration, attributed to escalating energy and commodity costs, intensifies pressure on the Bank of Japan to consider raising interest rates. Governor Kazuo Ueda has signaled a pivot towards inflation fighting, suggesting a June rate hike is likely, prioritizing inflation risks over economic activity concerns. Japan's real wages also climbed 1.9% year-on-year in April, the fourth consecutive monthly gain, further supporting the case for a rate hike.
In contrast, the Philippines experienced a slowdown in inflation, with its CPI decelerating to 6.8% year-over-year in May, down from 7.2% in April and below analyst expectations. This moderation was primarily driven by slower price growth in transport, food, and housing. However, the Bangko Sentral ng Pilipinas still plans to proceed with a rate hike. Turkey's annual inflation rate surged to 73.5% in May, exceeding economists' expectations and marking another month of climbing prices, influenced by a global energy shock. Policymakers in Turkey face an interest-rate decision soon.
The United States showed persistent cost pressures, with the ISM Services Prices Index rising to 71.3 in May from 70.7 in April, although the overall ISM Services PMI exceeded expectations at 54.5. Initial jobless claims, however, increased to 225,000 for the week ended May 30, more than economists forecast, though the labor market is described as stable. In the Eurozone, the services PMI contracted for the third consecutive month, falling to 47.7 in May. Input costs surged at their sharpest rate in three-and-a-half years, and charge inflation hit a 38-month high, suggesting a potential 0.2% quarterly GDP decline. Canada's Ivey PMI rose to 58.2 in May, an 8-month high, with its adjusted prices index also increasing to 78.0, indicating heightened inflation pressures.
Other Asian markets showed caution, with South Korea's KOSPI index falling over 6% and its won reaching its weakest level against the dollar since March 2009. Hong Kong stocks declined amid tightened capital outflow controls. India's inflation likely climbed to 4.0% in May, nearing the Reserve Bank of India's target, driven by rising vegetable prices and higher fuel costs. Norway's core inflation unexpectedly rose to 3.4% in May, potentially influencing Norges Bank's next interest rate decision. Ghana's inflation accelerated to 3.7% in May, driven by food prices, though the central bank maintained its interest rate. Vietnam's CPI accelerated to 5.60% in May, with housing, food, energy, and transport costs as primary drivers. Brazil's inflation rose to 4.64% in May, exceeding the central bank's target band. Indonesia's CPI inflation accelerated to 3.08% in May, primarily driven by rising food prices. Switzerland's annual inflation held steady at 0.6% in May, with higher housing rentals, hotel prices, and fuel costs contributing to a monthly increase, while the strong Swiss franc exerts deflationary pressure.