EWJV - Japanese Consumer Inflation Rose In June Putting Pressure On The Bank Of Japan To Raise Interest Rates

2024-07-19 03:12:00 ET

Summary

• The actual figures slightly missed market consensus, but showed that inflationary pressures are building on both the supply and demand sides.
• We think a reacceleration in service prices should give more confidence to the Bank of Japan.
• Given the recovery in consumption, solid wage growth, and the potential for further inflationary pressures from a weaker yen, we believe the Bank of Japan is likely to raise its policy rate by 15bp.

By Min Joo Kang

Headline CPI inflation stayed at 2.8% YoY in June for a second month (vs 2.8% in May, 2.9% market consensus)

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