1.9%! Japan's July Inflation Hits Year High as Energy and Fresh Food Prices Both Accelerate

Energy prices turned positive for the first time since November 2025, as Middle East conflict-driven crude oil costs have outpaced the offsetting capacity of government subsidies; July wholesale inflation reached 7.2%, with electricity prices as the largest contributor, indicating that energy costs are accelerating transmission from the production side to the consumer side. Fresh food prices surged 7% year-on-year, nearly doubling from the previous month. The stronger data confirms official warnings and further reinforces market expectations for the Bank of Japan to accelerate monetary policy tightening.