Japan’s wholesale prices jumped 4.9% in May, the sharpest rise since September 2008, lifted by rising commodity prices, Bank of Japan data showed Thursday.
The prices of goods traded between companies marked the third straight monthly gain as COVID-19 vaccine rollouts in many countries boost global economic recovery hopes.
The wholesale data came as Japan’s core consumer price index, an indicator of inflation, has been hovering around zero amid the coronavirus pandemic.
Wholesale prices affect consumer prices and economists are closely watching whether rising raw material costs will be passed onto consumers. In April, wholesale prices increased 3.8%.
The biggest contributor to the sharp rise in wholesale prices in May was petroleum and coal products, which surged 53.5% from a year earlier, reflecting recent gains in crude oil and other commodity markets.
As demand picks up, nonferrous metal prices jumped 41.6%. Prices of scrap soared 91.6%.
“We have seen rises in commodity markets supported by a global economic recovery impacting a wide range of products, pushing up wholesale prices in Japan,” a BOJ official told reporters.
Among decliners, electricity, city gas and water bills fell 3.9%, the data showed.
The rollout of COVID-19 vaccines has raised hopes for a global economic recovery but the impact of the pandemic still remains.
Japan has lagged behind other major economies such as the United States and Britain in inoculating its population and is now seeking to accelerate vaccinations ahead of the Tokyo Olympics and Paralympics this summer.
The world’s third-largest economy is expected to see another contraction in the April-June quarter with soft domestic demand.
In May, import prices rose at the fastest pace since August 2008, up 25.4% from a year earlier, while export prices gained 11.0%. Both figures are in yen terms.
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