BOJ Sees Middle East Conflict Adding To Japan's Price Pressures

BOJ Sees Middle East Conflict Adding To Japan's Price Pressures as officials warn inflation could worsen through faster pass-through from firms to consumers. Several regions have flagged planned summer price hikes for food and everyday necessities, and the central bank said companies are passing higher input costs along more quickly than in the past. The meeting ending July 31 includes a review of growth and inflation forecasts, with the policy rate currently at 1%. Higher oil prices are a key risk because Japan imports most of its fuel, and wholesale inflation already hit 6.3% in May, the highest in three years. The outlook matters for markets because clearer signs of cost leakage could bring forward expectations of further rate increases, affecting shorter-dated government bond yields and yen sensitivity.