Wholesale prices in Japan rose in July at their fastest annual pace in 13 years, data showed Thursday, in a sign that inflation in global commodities and a weak yen have been pushing up raw material import costs for a broad range of goods.
There is uncertainty, however, on whether companies will start to pass on the higher costs to households and prop up consumer inflation, which remains stuck around zero due to weak consumption unlike in other advanced nations, analysts say.
The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 5.6% in July from a year earlier, Bank of Japan data showed, beating a median market forecast for a 5.0% gain.
It accelerated sharply from a 5.0% increase in June and marked the fastest pace of growth since September 2008, when the index rose 6.9%, the data showed.
On a month-on-month basis, wholesale prices rose 1.1% in July after gaining 0.6%, marking the biggest increase since October 2019, the data showed.
Wholesale prices rose for many raw materials including those for wood, which spiked 33.1% in July from a year earlier, and oil and coal goods, which saw prices rise 38.8%, the data showed.
"We're seeing a wide range of wholesale goods prices rise reflecting the global recovery, which is pushing up commodity costs," said Shigeru Shimizu, head of the BOJ's price statistics division.
"Japan's wholesale prices will likely remain under upward pressure for the time being, though there's uncertainty on how a global resurgence in COVID-19 infections could affect the outlook," Shimizu told a briefing.
The nation's economy is recovering moderately as robust exports offset some of the weakness in consumption. But a resurgent coronavirus has forced Japan to reimpose state of emergency curbs, casting doubt over the strength of the recovery.