<div id="readability-page-1">Inflation surge: Producer prices jumped 6.3% in May, beating forecasts and marking the sharpest annual rise in over three years. Rate hike expectations: Markets are widely anticipating a BOJ rate increase to 1% next week, with more hikes projected later this year. Market pullback: Major indices including the TOPIX and Nikkei 225 ended lower as traders weighed the inflation data and policy outlook.</div>

<p>Japan's wholesale inflation surged to a three-year high, with producer prices rising 6.3% in May, exceeding forecasts. This sharp increase has fueled expectations of a Bank of Japan rate hike to 1% next week, with further increases projected later this year. Consequently, major stock indices, including the TOPIX and Nikkei 225, retreated as investors weighed the inflation data against the tightening monetary policy outlook.</p>

- Producer prices surged by 6.3% in May, representing the highest annual increase in over three years.  
- Markets expect the Bank of Japan to raise rates to 1% next week, with additional hikes anticipated later this year.  
- Major indices, including the TOPIX and Nikkei 225, closed lower as traders assessed the inflation data and policy implications.

Japan wholesale inflation hits 3-year high, stocks retreat