Japan’s annual wholesale inflation slowed for the fourth consecutive month in July, reflecting the central bank’s belief that raw material cost pressures will ease. Food and agriculture prices continued to rise, indicating ongoing inflationary pressure that could lead to market expectations of a Bank of Japan interest rate hike.

The corporate goods price index (CGPI) rose 2.6% in July from a year earlier, slightly below market expectations. Import prices fell 10.4% year-on-year in July, with chemical and steel prices dropping while food and beverage prices increased by 4.2%.

The Bank of Japan raised interest rates to 0.5% in January after ending a decade-long stimulus program. Despite core consumer inflation exceeding the 2% target, Governor Kazuo Ueda is cautious about further rate hikes, citing inflation driven by temporary factors like higher raw material costs.

Read more at Yahoo Finance: Japan’s wholesale inflation slows for 4th month in July