Euro-Area Inflation Eases Below ECB Forecasts, While Japan's Tankan Report Signals Broadening Inflation Risks

Euro-area inflation data for June came in softer than expected, with headline inflation slowing to 2.8% and core inflation easing to 2.4%, suggesting weaker inflationary pressures than the ECB had anticipated in its June projections. Conversely, Japan's Tankan report revealed a surge in the output price index for all enterprises, surpassing previous records. The robust services sector, with its PMI jumping to 52.2 and input price index matching a record high, indicates increasing risks of inflation broadening out through the services sector in Japan.