2024-08-16 03:45:35
TOKYO (Reuters) – Japan’s consumer inflation probably rose for a third straight month in July, a Reuters poll of 18 economists showed, leaving open the possibility that the Bank of Japan could still consider another rate hike after raising its short-term interest rate to 0.25% last month.
Other data next week are expected to show export growth accelerated in July as auto and chip-related shipments rebounded, although the export growth will be less than the import growth and lead to a trade deficit.
The core consumer price index (CPI), excluding fresh food but including energy, probably rose 2.7% year-on-year in July, accelerating from a 2.6% increase in the previous month.
Citing Tokyo-area inflation data for July released earlier, Norinchukin Bank chief economist Takeshi Minami said that while price increases for food and service costs such as hotel fees have slowed, the government’s end to energy subsidies could cause overall inflation to rise faster.
That would keep inflation above the BOJ’s 2% target for a 28th straight month, supporting the view of BOJ officials that the central bank should continue to normalize its ultra-easy policy if the economy and prices evolve in line with their forecasts.
Data released on Thursday showed that Japan’s economy grew a much faster-than-expected 3.1% in the second quarter from the previous quarter, as strong and much-needed consumption growth helped the economy rebound from a slump at the beginning of the year, further supporting views that the Bank of Japan will raise interest rates further.
Economists polled by Reuters forecast exports likely rose 11.4% in July from a year earlier, faster than a 5.4% gain in June. Imports were expected to rise faster, by 14.9%, partly due to the impact of a weak yen on energy imports, compared with a 3.2% gain in the previous month, leaving the trade deficit at 330.7 billion yen ($2.22 billion).
The Ministry of Internal Affairs and Communications will release consumer price index data at 8:30 a.m. on August 23 (23:30 GMT on August 22), and the Ministry of Finance will release trade data at 8:50 a.m. on August 21 (23:50 GMT on August 20).
Machinery orders, a highly volatile but leading indicator of capital spending over the next six to nine months, probably rebounded to 1.1% month-on-month in June after falling 3.2% in May, the survey showed. The data will be released at 8:50 am on August 19 (23:50 GMT on August 18).
($1 = 148.9700 Japanese Yen)
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