In April, wholesale prices in Japan unexpectedly accelerated to 4.9% year-over-year, according to statistics from the Bank of Japan.
The market expected much calmer figures. Analysts anticipated growth of about 3%, while in March the revised figure was 2.9%.
The main blow came from imports. Due to the situation around Iran, Japan faced a new jump in prices for oil and petrochemical feedstocks.
Against this backdrop, imports calculated in yen rose much more sharply than the previous month, with growth already reaching 17.5% year-over-year. For comparison, in March growth was about 8%.
Problems were exacerbated by disruptions around the Strait of Hormuz. Because of this, feedstocks and oil soared again.
For Japan this is especially painful because the country is heavily dependent on imported fuel. With expensive oil and a weak yen, business expenses began to rise rapidly in almost all sectors.
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Nikkei Asia writes that companies are no longer delaying price hikes and are passing new costs on to buyers much faster than before.
Almost everything is getting more expensive now: fuel, chemicals, metals, and food products.
Some effects have already reached even ordinary goods on store shelves.
For example, snack maker Calbee temporarily abandoned colored packaging due to a shortage of printing materials related to petrochemicals.
Auto parts manufacturers are also seeing rising costs, especially for plastic and aluminum.
Problems have also reached the technology sector. The market is experiencing a growing shortage of helium, which is needed for electronics and semiconductor production.
Bank of Japan Increasingly Talks About Rate Hike
Even before the release of the new statistics, some members of the Bank of Japan leadership advocated for tightening policy.
At the April 27–28 meeting, the regulator kept the rate at 0.75%, but the decision was not unanimous. Three board members supported an immediate increase to 1%.
Among them were Hajime Takata, Naoki Tamura, and Junko Nakagawa.
Later, the Bank of Japan published a brief summary of the discussion. One participant directly stated that if inflation intensifies, it is not worth delaying a rate hike.
After the latest inflation data, talk of a rate hike within the Bank of Japan has become noticeably more confident.
Earlier, the regulator had already revised its forecasts for the 2026 fiscal year. Inflation expectations were raised from 1.9% to 2.8%, while the economic growth forecast, on the contrary, had to be cut almost in half—to 0.5%.
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Now the market is increasingly expecting a new rate hike as early as this summer.
The market is already seriously pricing in a possible rate hike this summer. According to Barclays OIS, the probability of such a move is estimated at about 74%.
Kazuo Ueda said several months ago that the Bank of Japan is ready to tighten policy further if price growth does not begin to slow.
Rate Hike Has Already Hit Crypto Market
The cryptocurrency market has already reacted rather nervously to the rate hike in Japan.
For example, after the Bank of Japan decision to raise the rate to 0.25% in the summer of 2024, bitcoin fell in just a few days from about $65,000 to $50,000.
A similar story happened in January 2025. Then the rate rose to 0.5%, and BTC lost about a quarter of its value in the following weeks.
If the Bank of Japan raises the rate again in June, pressure on the crypto market could quickly return.
This could hit traders hardest who use cheap yen loans for leveraged trading.
The next meeting of the Bank of Japan is scheduled for June 16–17. If inflation does not start to cool by then, supporters of another rate hike within the regulator will find it much easier to push through a tougher decision.
