Japan's corporate goods prices rose faster than expected in August, reinforcing the case for the Bank of Japan to continue raising interest rates. The index of input prices for Japanese firms increased 7.6% year-over-year, above the 7.4% median forecast, though slightly down from a revised 7.7% in July — the highest since February 2023. Monthly prices fell 0.2% after an upward revision to 0.4% the prior month.

The increase was driven by oil and coal products, chemical products, information and communications equipment, and non-ferrous metals. Companies continue to face pressure passing on rising input costs related to energy, shipping, packaging, and wage increases amid a tight labor market.

The Bank of Japan is widely expected to raise its benchmark rate by a quarter point to around 1.25% on Sept. 18.