Overview
- Wholesale prices rose 2.7% year on year in October after 2.8% in September, coming in above the roughly 2.5% market forecast, according to Bank of Japan data.
- The yen-based import price index fell 1.5% from a year earlier, helping cool overall pressures even as prices for rice, other food products and some non-ferrous metals continued to climb.
- On a monthly basis, producer prices increased 0.4%, a touch stronger than expected and a sign underlying pressures have not fully faded.
- The BOJ, which lifted its policy rate to 0.5% in January after exiting massive stimulus, remains cautious as it seeks inflation driven by domestic demand rather than imported costs.
- Analysts warn that expansionary fiscal plans, including proposed utility-bill cuts under Prime Minister Sanae Takaichi, could weaken the yen and raise import costs, while a Reuters poll points to core CPI likely quickening to around 3.0% in October ahead of next week’s data release.