Japan's producer prices surged 7.1% year-on-year in June 2026, accelerating from an upwardly revised 6.6% increase in May and outpacing consensus estimates of a 6.8% gain. The reading marks the sharpest annual wholesale inflation jump since March 2023, driven by intense cost pressures and soaring energy prices linked to supply chain disruptions from the war in Iran. On a monthly basis, factory gate prices moderated to a 0.4% expansion, the slowest growth in four months, cooling down from an upwardly revised 1.1% print in May. Financial markets reacted positively on Friday, with the Nikkei 225 Index climbing 1.5% to above 68,700 and the broader Topix Index advancing 0.8% to 4,052, while the Japanese yen strengthened past 161.5 per dollar.