US, Japan Inflation Rise Prompts Central Bank Scrutiny

U.S. inflation accelerated in June, with the Consumer Price Index rising 2.7% year-over-year and core CPI up 2.9%, driven by increases in food and energy prices. In parallel, the Bank of Japan is expected to consider raising its inflation forecast for the current fiscal year at its late July policy meeting, citing unexpectedly strong food and oil price increases. Despite the potential upward revision, Japanese officials are likely to maintain their inflation forecasts for 2026 and 2027, while keeping interest rates unchanged amid ongoing uncertainty over U.S. tariffs and underlying inflation still below target. The BOJ's updated projections will be published after its July 30-31 meeting. Both the U.S. and Japan are facing persistent pressures from rising food and energy costs, leading their central banks to monitor inflation closely and weigh policy adjustments. Policymakers in both countries are proceeding cautiously to balance inflation control with maintaining economic growth.