TOKYO, July 17 (Reuters) – Japan’s core consumer inflation probably picked up in June from the previous month due to elevated energy prices, as well as technical factors including revisions to medical service fees, a Reuters poll showed on Friday.
With price pressures from the Middle East conflict not expected to abate anytime soon, the outcome would likely strengthen the case for the Bank of Japan to raise interest rates further.
The nationwide core consumer price index (CPI), which includes energy items but excludes fresh food prices, was forecast to have risen 1.6% in June from a year earlier, a poll of 16 economists showed. That would mark an acceleration from May’s 1.4%, but would keep inflation below the BOJ’s 2% target for a fifth straight month.
“Although food inflation excluding fresh food is continuing to ease, the year-on-year increase is expected to widen from the previous month because higher crude oil prices linked to the Iran situation have reduced the decline in energy prices,” said Keisuke Kobayashi, economist at Mitsubishi UFJ Research & Consulting.
Mizuho Securities market economist Ryosuke Katagi said revised medical service fees are also expected to push inflation higher, while the impact of the worsening Iran conflict is likely to become more visible from the summer onward.
The data will be among the factors the BOJ will scrutinise at this month’s policy meeting, when the board will conduct a quarterly review of growth and price forecasts.
Japan’s wholesale inflation surged 7.1% in June from a year earlier, marking the fastest year-on-year rise since March 2023.
While the U.S. and Iran reached a tentative deal to end the war in June, the truce remained fragile, with both sides exchanging missile strikes.
The internal affairs ministry will announce CPI data at 8:30 a.m. on July 24 (2330 GMT on July 23).
(Reporting by Satoshi Sugiyama; Editing by Jamie Freed)
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