The domestic corporate goods price index announced by the Bank of Japan rose 6.8% year on year in September, slowing from a 7.6% increase the previous month. This is supporting market expectations of a rate hike by year-end.
The domestic corporate goods price index rose 6.8% year on year in September, slowing from a 7.6% increase the previous month. The increase was below the market forecast of 7.6%.
Prices of agricultural, forestry and fishery products declined, falling 0.3% month on month as well. The buildup of inventories of brown rice and milled rice, along with expanded energy subsidies, is said to have weighed on petroleum and coal products.
Meanwhile, nonferrous metals rose 40.2% year on year as copper prices increased amid growing AI-related demand. Information and communications equipment rose 15.3% on higher memory prices. Petroleum and coal products and chemicals also recorded strong growth following increases in crude oil and naphtha prices.
At its September monetary policy meeting, the Bank of Japan raised its policy rate to 1.25% and maintained it at its highest level in 23 years. Governor Ueda said that the pass-through of corporate goods prices to consumer prices was progressing and indicated that the BOJ would remain alert to upside risks to prices. Some market participants continue to expect an additional rate hike by year-end.