Wholesale prices logged a 2.4 percent year-on-year gain in August, backed by higher prices for electricity and crude oil caused by the government’s weakening of the yen to stoke inflation, the Bank of Japan said Wednesday.
The index of corporate goods prices stood at 102.5 against the 2010 base of 100, the central bank said in a preliminary report. The size of increase was the biggest since November 2008 and the fifth in a row, according to the BOJ, which is engaged in a radical quantitative easing program aimed at halting deflation.
The gain, which followed a revised 2.3 percent gain in July, was caused by electricity, gas and water prices, which collectively rose some 8.5 percent from a year earlier.
Petroleum and coal products surged 16.0 percent, reflecting a rise in crude oil prices caused by uncertainty surrounding a potential war with Syria, the BOJ said.
Prices for lumber and wood climbed 12.3 percent amid solid demand for housing materials, while prices for information and communication equipment fell 5.1 percent due partly to a drop in semiconductor prices, the BOJ said.
A BOJ official said price hikes were seen in a broad range of items, reflecting the bludgeoning of the yen and solid housing investment that has pushed up materials prices.
“A positive circulation mechanism is gradually expanding,” the BOJ official said. “Price hikes are likely to spread further, motivated by profit recovery if the balance of demand and supply improves.”
On a month-to-month basis, however, the index was up 0.3 percent from July.
In yen terms, Japanese export prices gained 12.6 percent from a year earlier, while import prices surged 17.6 percent due to the weakening of the yen.
On a contract currency basis, export prices fell 1.9 percent and import prices fell 0.2 percent.