Key facts
- Japan's core consumer inflation is expected to remain steady at 1.8% in August.
- The nationwide core CPI is expected to be the same as July's 1.8% year-on-year increase.
- Japan's wholesale prices rose 7.6% year-on-year in August.
- Analysts expect the Bank of Japan to hike interest rates to 1.25% at its meeting ending next Friday.
- The internal affairs ministry will announce CPI data at 8:30 a.m. on Friday, September 18.
Japan's core consumer inflation is expected to have held steady in August, with economists polled by Reuters anticipating a 1.8% year-on-year increase, the same as in July. This figure remains below the Bank of Japan's 2% target. Rising oil prices, influenced by the conflict in the Middle East, are pushing up costs for daily necessities, according to Ryohei Ikeda, an analyst at Mizuho Research Institute. However, government subsidies for electricity and gas bills are expected to counteract this upward pressure.
Data released on Friday indicated that Japan's wholesale prices remained elevated in August, increasing by 7.6% from the previous year. Higher fuel costs and import prices, exacerbated by a weak yen, are contributing to price pressures within the economy. Both major crude oil benchmarks were on track to finish the week above $100 a barrel for the first time since mid-May.
In response to persistent concerns over broadening price pressures and the weakening yen, analysts polled by Reuters anticipate the Bank of Japan will raise its interest rates to 1.25% at its upcoming two-day meeting, which concludes next Friday. The internal affairs ministry is scheduled to release the official CPI data at 8:30 a.m. on Friday, September 18.