Wholesale prices in Japan jumped 8.5% from a year earlier in December, marking the second-highest increase on record amid higher crude oil and commodity prices, Bank of Japan data showed Friday.
The rise in the prices of goods traded between companies followed a record 9.2% gain in November and marked the 10th straight month of growth, an indication that upward pressure on consumer prices is persisting.
The BOJ data also showed wholesale prices gained 4.8% in 2021, the highest since comparable data became available in 1981, reflecting rising energy prices that came with a global economic recovery from the COVID-19 shock a year earlier.
Higher input costs have prompted Japanese firms to gradually pass costs on to consumers, leading to higher fuel and food prices.
The yen’s weakness is also boosting import prices, a headache for the resource-poor country.
The BOJ, which has a long-standing consumer inflation target of 2%, has been watching how widespread price hikes will be across sectors, with consumers starting to feel the impact of rising prices of food and other items.
In December, prices of petroleum and coal jumped 36.6%, tracking higher crude oil prices. The gain was smaller than a revised 49.6% a month earlier.
Iron and steel, as well as nonferrous metal prices, also rose, up 25.5% and 26.9%, respectively. Lumber and wood product prices advanced 61.3% as demand remained strong.
“We can observe higher commodity prices passed on to wholesale prices,” a BOJ official said, adding that price increases were seen widely.
Consumer prices have been rising in recent months but the increase remains moderate compared with the surge in wholesale prices, partly because companies are often reluctant to raise consumer prices for fear of dampening demand.
Still, a combined 77.4% of respondents in a recent BOJ survey said that prices gained considerably or slightly from a year earlier, marking the highest level in six years.
Import prices soared 41.9% due to the yen’s depreciation while export prices gained 13.5%, both in yen terms.
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