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Investing.com-- Japanese producer price index inflation rose slightly more than expected in July, but grew at its slowest pace in 11 months as local producers grappled with higher overseas tariffs.
PPI grew 2.6% year-on-year in July, government data showed on Wednesday. The print was higher than expectations of 2.5% but slowed sharply from the 2.9% rise seen in the prior month.
PPI grew 0.2% month-on-month as expected.
The print comes amid some signs of cooling inflation in Japan, especially as the country faces increased U.S. trade tariffs, which have weighed on local manufacturing.
PPI inflation has declined steadily this year after hitting a near two-year high in March. Declines in PPI inflation have also largely tracked softer consumer price index inflation, as individual and household spending cooled in recent months.
Softening inflation has raised increased questions over just how much headroom the Bank of Japan has to raise interest rates further.
The central bank signaled during its July meeting that it will raise interest rates in tandem with higher inflation and economic growth.
U.S. trade tariffs, especially a 25% duty on automobile imports, have been a key source of pressure on Japanese producers.
But Tokyo struck a recent trade deal with Washington, lowering its overall tariffs to 15%.