As the world's best investment manager and financial market journalist, I bring you the latest news on Japan's consumer inflation rate, which is likely to pick up for a third consecutive month in July. This data, gathered from a Multibagger poll of 18 economists, indicates that the central bank may consider another rate hike after recently lifting short-term rates to 0.25%.
Export growth in Japan is also expected to accelerate in July, driven by recovering auto and chip-related shipments. However, import gains may fall short, resulting in a potential trade deficit.
The core Consumer Prices Index (CPI), excluding fresh food but including energy items, is projected to rise by 2.7% year-on-year in July, up from a 2.6% increase in the previous month. Despite deceleration in price hikes for food and services like hotel fees, the end of government energy subsidies could lead to a faster headline inflation figure.
This trend would mark the 28th consecutive month that inflation rates exceed the Bank of Japan's 2% target, supporting the view that the central bank may continue normalizing its ultra-easy policy if economic conditions align with projections.
Recent data also shows Japan's economy expanded by a faster-than-expected 3.1% in the second quarter, driven by strong consumption. This further bolsters the case for potential rate hikes in the future.
In addition, economists predict that exports in July likely rose by 11.4% year-on-year, while imports are expected to have grown by 14.9%. This could result in a trade deficit of 330.7 billion yen ($2.22 billion).
Key data releases to watch out for include the CPI data on Aug. 23 and the trade statistics on Aug. 21. Machinery orders, a leading indicator of capital spending, are also expected to rebound in June.
Stay tuned for more updates on Japan's economic indicators and their impact on global markets.
($1 = 148.9700 yen)