Japan Wholesale Prices Rise 6.8% as IMF Forecasts Growth Slowdown
The Bank of Japan reports a slowdown in wholesale price growth while the IMF projects economic expansion to drop to 0.7 percent through 2027.
Japan's wholesale prices rose 6.8 percent in the year to September, according to data released by the Bank of Japan on October 13. While this figure is lower than the 7.6 percent gain recorded in August and below market forecasts, the Producer Price Index fell 0.3 percent from the previous month. This represents the sharpest slowdown in producer price growth since May 2025, suggesting that inflationary pressure for Japanese firms may have peaked.
Despite the slowdown, a 24.5 percent surge in the yen-based import price index shows that a weak yen and high crude oil prices, linked to the US-Israeli war on Iran, continue to drive up raw material costs. Governor Kazuo Ueda stated that the timing of future rate hikes depends on how these wholesale pressures translate into consumer inflation. The bank previously raised rates to a 31-year high of 1.25 percent in September.
The International Monetary Fund projected on October 13 that the Bank of Japan will likely continue raising interest rates gradually toward a neutral setting. The IMF forecasts that Japan's economic growth will slow to 0.7 percent in 2026 and 2027, down from 1.2 percent last year. To combat currency weakness and market volatility, the Government of Japan and the Federal government of the United States conducted a joint operation to support the yen.
