Japan’s wholesale inflation hits 4%, keeps BOJ rate-hike bets alive

[TOKYO] Japan’s annual wholesale inflation hit 4.0 per cent in February, data showed on Wednesday, underscoring pressure from rising raw material costs that will keep alive market expectations of a near-term interest rate hike by the central bank.

The rise in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, matched a median market forecast. It slowed from a 4.2 per cent year-on-year increase in January.

Yen-based import prices fell 0.7 per cent in February from a year earlier after a 2.3 per cent gain in January, data by the Bank of Japan showed.

The central bank ended a decade-long, massive monetary stimulus last year and raised short-term interest rates to 0.5 per cent from 0.25 per cent in January on the view Japan was on the cusp of sustainably achieving its 2 per cent inflation target.

With consumer inflation exceeding its target for nearly three years, the BOJ has signalled its readiness to raise interest rates further if the economy sustains a moderate recovery. REUTERS