Commodity prices of Japanese companies continued to rise rapidly in July, and the cost pressure faced by companies is still high. Meanwhile, Bank of Japan officials are continuing to weigh whether to push for further interest rate hikes to curb inflation. According to data released by the Bank of Japan on Thursday, the corporate commodity price index, which measures corporate investment costs, rose 7.2% year on year in July, slightly lower than the 7.3% revised in June; the latter was the highest level since March 2023. On a month-on-month basis, corporate prices rose 0.1%, and the previous month's revised data rose 0.5%. This increase in the producer price index was mainly driven by rising prices of petroleum and coal products, chemical products, and non-ferrous metals. These data further show that the pressure on companies to pass on rising costs to customers is still strong, which supports the Bank of Japan's reasons for continuing to raise interest rates. After keeping the policy interest rate unchanged last month, Bank of Japan Governor Kazuo Ueda said that given the increased risk of rising inflation and the possibility that the pace of interest rate hikes may accelerate, the next action may be as early as September.

Commodity prices of Japanese companies continued to rise rapidly in July, and the cost pressure faced by companies is still high. Meanwhile, Bank of Japan officials are continuing to weigh whether to push for further interest rate hikes to curb inflation. According to data released by the Bank of Japan on Thursday, the corporate commodity price index, which measures corporate investment costs, rose 7.2% year on year in July, slightly lower than the 7.3% revised in June; the latter was the highest level since March 2023. On a month-on-month basis, corporate prices rose 0.1%, and the previous month's revised data rose 0.5%. This increase in the producer price index was mainly driven by rising prices of petroleum and coal products, chemical products, and non-ferrous metals. These data further show that the pressure on companies to pass on rising costs to customers is still strong, which supports the Bank of Japan's reasons for continuing to raise interest rates. After keeping the policy interest rate unchanged last month, Bank of Japan Governor Kazuo Ueda said that given the increased risk of rising inflation and the possibility that the pace of interest rate hikes may accelerate, the next action may be as early as September.