Wholesale prices rose 3.4 percent in October from a year earlier, climbing at the fastest pace in nine years on the back of higher energy costs, the Bank of Japan said Monday.
The index of prices for goods traded among companies gained for the 10th straight month to 99.4 against the 2015 base of 100, the central bank said in a preliminary report. After stripping out the effect of a 2014 consumption tax hike, the pace of increase was the fastest since October 2008 when it rose 4.5 percent.
Upward momentum in wholesale prices could lead businesses to gradually pass costs on to households, helping to push nationwide inflation closer to the BOJ’s 2 percent target.
But firms have appeared reluctant to do so for fear of chasing away customers. Core consumer prices, which exclude fresh foods, only rose 0.7 percent in September.
Among items constituting October wholesale prices, oil and coal products rose 15.8 percent amid a production cut by resource-rich countries which pushed up electricity and other utilities 11.2 percent.
Nonferrous metals such as aluminum and copper rose 22.4 percent on robust demand from China and the United States.
“Most of these price gains were caused by moves in the global market. Domestic demand continues to make only a marginal contribution,” a BOJ official told a press briefing.
In yen terms, import prices were up 15.3 percent from a year before, partly due to a weakening of the Japanese currency, while export prices rose 9.7 percent.