Bank of Japan branch manager: Price pressures are spreading from businesses to consumers, with over 80% probability of a rate hike in December

智通财经2026/10/08 06:36

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(1) A branch manager of the Bank of Japan stated on Thursday that cost-push price increases in Japan are spreading from inter-company transactions to consumer-facing sectors, indicating that nationwide inflationary pressures are expanding. (2) According to a statement from the Bank of Japan, fueled by Middle East conflicts and a weaker yen, energy and raw material costs are rising, and transport and labor costs are also increasing. Many companies are raising B2B business prices to pass on higher costs. (3) The central bank noted that these cost pass-through practices are expanding to consumer-facing businesses. More companies are raising retail prices to reflect input costs, while also assessing consumer confidence. However, as consumers remain price-sensitive, some companies are striving to limit price increases and are expanding their line of low-priced goods. (4) In its quarterly regional economic report also released Thursday, the Bank of Japan upgraded its assessment for two of the country's nine regions, while maintaining its view for the other seven. The central bank noted that while there are some weak spots in local economies, recovery is underway. (5) After raising policy rates to 1.25% last month, the Bank of Japan is expected to hike rates again soon to address persistent inflation. The overnight index swap market currently puts the probability of a rate hike by the Bank of Japan in December at over 80%. (6) Earlier this week, Bank of Japan Governor Kazuo Ueda pointed out that there is a risk that underlying inflation could exceed the bank's 2% target, and reiterated the intention to continue tightening monetary policy. The policy board is scheduled to hold its next meeting from October 29 to 30.

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