Wholesale prices in Japan jumped 9% in November from a year earlier, marking the steepest gain on record amid higher energy costs and a weak yen, Bank of Japan data showed Friday.
The prices of goods traded between companies gained for the ninth straight month, underscoring continued commodity inflation at a time marked by weak consumer demand after the economy took a hit from the COVID-19 pandemic.
The 9% year-on-year rise is the sharpest since comparable data became available in January 1981 and follows a revised 8.3% increase in October, the BOJ said.
Recent higher wholesale prices have yet to fully affect consumer prices in Japan, where accelerating inflation is not a pressing issue, bolstering the case for the BOJ to retain its monetary easing with its 2% target still far off.
Resource-poor Japan is susceptible to swings in crude oil and other energy prices as it relies on imports. The yen’s weakness also inflates import costs, though it is seen as a boon to exporters due to increased overseas profits.
Prices of petroleum and coal products surged 49.3% in November from a year ago, while those of lumber and wood products jumped 58.9%, reflecting higher demand as economic activity gained traction. Nonferrous metal prices gained 32.8%.
Japanese companies are increasingly facing pressure to pass on higher costs to consumers by raising prices even though they tend to absorb them rather than hiking prices for fear of hurting consumer demand.
Gasoline and kerosene prices are at high levels heading into the winter, when energy demand increases, and some food companies have announced price hikes to pass on rising raw material costs.
Import prices gained 44.3%, the sharpest gain since January 1981, while those of exports were up 15%, both in yen terms.
BOJ Gov. Haruhiko Kuroda has said the yen’s recent weakness is positive for the Japanese economy, underlining its profit-boosting effect on exporters and firms with overseas subsidiaries.
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