The yen weakened to multi-decade lows against the dollar this week and the Bank of Japan is getting increasingly worried that rising import costs are creating upside risks to inflation. Indeed, the June Tokyo CPI showed a pick-up in price gains among those components most sensitive to import costs. And while the Bank may want to see underlying inflation accelerate for more than just one month, the rebound in economic activity signaled by May's strong industrial production and retail sales data should tilt the balance towards a policy rate hike at its July meeting.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services