Wholesale prices rose 2.8 percent across the country in June from a year earlier — climbing at the fastest pace this year — in a reflection of the higher cost of oil imports, the Bank of Japan said Wednesday.
The upward momentum in the prices of goods traded between companies could lead to higher consumer prices, which remain stuck below the central bank’s 2 percent target.
Among items included in the data, oil and coal prices shot up 23.4 percent, the largest increase since March 2017. The market for crude rose after the U.S. reinstated Iran sanctions, while the output hike by oil producers such as Saudi Arabia and Russia undershot expectations.
Steel climbed 4.5 percent amid demand from the construction industry ahead of the 2020 Tokyo Games, while nonferrous metals including aluminum and copper rose 10.3 percent.
Meanwhile, electronic components and devices slipped 0.1 percent, the first decline since January 2017 as global demand for memory chips used in smartphones slowed.
Import prices swelled 10.5 percent while that of exports rose 3.5 percent.
BOJ Gov. Haruhiko Kuroda is seeking to lift prices to ensure the world’s third-largest economy makes a clean break from a decade and-a-half of growth-stunting deflation.
But tepid wage growth, despite the tightest labor market in decades, has kept progress slow. Core consumer prices, which exclude fresh foods but includes energy costs, rose just 0.7 percent in May from a year before.