Market Updates
Japan's Producer Price Inflation Accelerates Fourth Consecutive Month, Stoking Fears of a Pick Up in Consumer Inflation
Akira Ito
12 Jun, 2024
Tokyo
Benchmark indexes in Tokyo traded down on Wednesday, trimming gains from the week and erasing gains from the previous session.
The Nikkei and the Topix indexes dropped more than 0.5% as investors reviewed the latest update on producer price inflation.
Producer price inflation rose 2.4% in May and accelerated for the fourth month in a row, the Bank of Japan reported on Wednesday.
Investors turned cautious after the annual pace of factory-gate price inflation rose faster than expected, stoking fears of an acceleration in consumer price inflation.
Producer price inflation was positive for the 40th month in a row, indicating manufacturers are passing higher raw material prices on to consumers.
Investors were also cautious ahead of the U.S. Federal Reserve's monetary policy decisions later in the day, and the central bank is widely anticipated to hold its interest rate range steady between 5.25% and 5.5%.
The Japanese yen weakened to 157.23 against the U.S. dollar, and the yield on a 10-year Japanese government bond stayed below 1% at 0.98%.
Japan Stock Movers
The Nikkei 225 stock average declined 0.5% to 38,913.50, and the Topix index fell 0.7% to 2,756.88.
Banks, tech companies, and vehicle makers were among the leading decliners.
Mitsubishi UFJ, Mizuho Financial Group, and Sumitomo Mitsubishi declined between 0.5% and 1.5%.
Softbank, Advantest, Tokyo Electron, and Screen Holdings traded mixed and ranged between a decline of 0.3% and a gain of 0.2%.
Toyota Motor decreased 1.4% to ¥3,208.0, Honda Motor rose 0.1% to ¥1,710.0, and Nissan Motor fell 0.1% to ¥545.30.
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