EconomyJapan

Japan producer inflation hits 7.1%; Bank of Japan official urges caution

Japan's producer prices rose 7.1% in October, adding to evidence of lasting price pressure. A Bank of Japan board member urged caution on the pace of further rate increases.

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Japan's producer inflation picked up to 7.1% in October. Corporate goods inflation quickened in October, the first such pickup in three months. The data add to the case for another Bank of Japan interest-rate increase.

Toichiro Asada, a Bank of Japan board member, said the bank needs to be cautious and keep watching how higher rates affect the economy. He warned that higher rates could weigh on the price trend. Asada is described as a dovish member, meaning one who favors a careful approach to tightening.

The debate inside the bank now centers on how fast to raise rates, not only whether to raise them. A further rate increase is being weighed for next month.

Background

Producer prices measure price changes at the wholesale level, before goods reach shoppers. The Bank of Japan sets interest rates for the Japanese economy.

GuideEconomic calendar: the data and decisions coming up

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