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2026-05-15 09:52:47
[Japan's wholesale inflation rate rises to a three-year high in April, fueling expectations of an interest rate hike] (1) Data released on Friday showed that Japan's wholesale inflation rate rose to a three-year high in April, driven by the war with Iran and the resulting increase in oil and chemical prices, providing more reasons for the Bank of Japan to raise interest rates as early as June. (2) Data showed that the Corporate Price Index (CGPI) rose 4.9% year-on-year in April, the largest increase since May 2023, far exceeding market expectations of 3.0%, and also significantly accelerating from 2.9% in March. (3) The import price index denominated in yen rose 17.5% year-on-year in April, the largest increase since December 2022, indicating that the depreciation of the yen is exacerbating the energy shock and further compressing corporate profit margins. (4) The scope of price increases has expanded: oil and coal prices rose 5.3% year-on-year in April, and chemical product prices rose 9.2% (of which naphtha prices surged 79.4%). The Strait of Hormuz is effectively closed, which has a huge impact on Japan, which is highly dependent on Middle Eastern oil sources. (5) Rihito Koike, senior economist at Soy Money Research Institute, said that if the price increase is limited to oil-related commodities, the Bank of Japan does not need to respond; however, if it expands to a wider range of commodities, the central bank may have to raise interest rates. Previously, some central bank policymakers had called for an "early" rate hike.
