(Bloomberg) -- Inflation as measured by Japan’s producer prices quickened in July, marking six consecutive months of acceleration, as the end of utility subsidies drove up energy costs.
The measure of input prices for Japanese firms gained 3.0% from a year earlier, the BOJ reported Tuesday. The gain missed exceeded economists’ expectations of a 3.1% increase. From the prior month, prices rose by 0.3%, matching the consensus estimate.
The report showed a 10.8% increase in yen-denominated costs for imported materials, in a reflection of the weak yen’s impact on inflation. Input costs for electricity, gas and water rose 6.7% from a year ago.
The yen’s slide this year has added upside pressure on inflation by boosting costs for imports of raw materials, food and fuel. Bank of Japan Governor Kazuo Ueda said after the bank raised its benchmark rate on July 31 that authorities would keep raising the rate if the outlook for prices and growth is materialized.
His hawkish tone was followed by a rebound in the yen and a plunge in stocks, which prompted his deputy Shinichi Uchida last week to promise officials would hold off on raising the rate at times when financial markets are unstable.
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