Inflation in Japan rises to 1.7%, the highest since December

WHAT HAPPENED

Japan's inflation rose from 1.5% to 1.7% annually in June, its highest level since December. The yen is around 163.8 per dollar and the cost of imports increased by 29.7% in a year.

WHY IT MATTERS

A weak yen makes imported oil, gas, food, and metals more expensive. This is already putting pressure on transportation, housing, household items, and health. The Bank of Japan raised its rate to 1%, but it remains below that of the U.S.; if the difference narrows, financial bets could be unwound and global markets could fall.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, Japan adds a source of volatility that can transmit to emerging markets like Mexico. It is not an immediate alert: inflation remains below the 2% target, but Japanese rates and the yen are signals to watch.