Global Market: Japan wholesale inflation hits over three-year high, reinforcing BOJ rate hike expectations

Japan's wholesale inflation climbed 7.1% year-on-year in June, marking the fastest rise since March 2023 and exceeding market expectations of 6.8%. The surge was driven by a 22.8% jump in fuel prices and a 39.2% rise in non-ferrous metals, compounded by a persistently weak yen that pushed the import price index up 29.7%. With corporate inflation expectations at record highs and the BOJ's policy rate already at a 31-year peak of 1%, most analysts expect another quarter-point hike to 1.25% before year-end, which could strengthen the yen and tighten global liquidity conditions.