France’s Inflation Holds Steady in July, While BOJ Maintains Policy Amidst Economic Recovery Signals

By / / Breaking News

Key Takeaways

  • France's July Consumer Price Index (CPI) remained stable at 1.0% year-over-year, aligning with expectations, while the harmonized CPI (EU-HICP) also held at 0.9% year-over-year.
  • French Producer Price Index (PPI) year-over-year growth was 0.2% in July, unchanged from the previous month, while the month-over-month PPI saw a significant improvement to -0.2% from -0.8%.
  • Bank of Japan (BOJ) Governor Kazuo Ueda indicated no significant change to the central bank's outlook for slower growth and inflation, maintaining the short-term interest rate at 0.5%.
  • Ueda noted that Japan's economy is recovering moderately, despite some lingering weaknesses, reinforcing the BOJ's "wait and see" approach to monetary policy.

France's inflation figures for July showed a period of stability, with both the national and EU-harmonized Consumer Price Index (CPI) holding firm. The July CPI year-over-year actual was 1.0%, consistent with the previous month's reading and analyst estimates. Similarly, the EU Harmonized CPI year-over-year remained at 0.9%, matching the prior figure and slightly exceeding the 0.8% estimate. Month-over-month, the CPI registered a 0.2% increase, in line with expectations but lower than the previous month's 0.4%. The EU Harmonized CPI month-over-month also saw a 0.3% rise, compared to 0.4% previously.

Producer prices in France presented a mixed picture. The Producer Price Index (PPI) year-over-year for July was 0.2%, unchanged from the prior month. However, the month-over-month PPI showed a notable improvement, coming in at -0.2% compared to the previous -0.8%. This suggests a slight easing in the pace of producer price declines.

Meanwhile, the Bank of Japan (BOJ) held its monetary policy steady. Governor Kazuo Ueda stated there was no significant change to the central outlook for slower growth and inflation, implying a continued cautious stance. The BOJ maintained its short-term interest rate at 0.5% for the fourth consecutive meeting. Ueda acknowledged that Japan's economy is recovering moderately, though he noted that some weaknesses remain. This assessment comes despite the Japanese Yen (JPY) paring some losses against the Dollar (USD) following Ueda's comments, which also highlighted the positive impact of the U.S.-Japan trade deal. The BOJ's patient approach reflects a careful balancing act between inflation risks and economic fragility, with potential for further tightening if inflation remains above 2% and wage growth accelerates.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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