Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Japan's wholesale prices rise at fastest pace in 13 years on commodities surge

06/09/2021 | 10:51pm EDT
Wholesalers check the quality of frozen tuna displayed during the tuna auctions, amid the coronavirus disease (COVID-19) outbreak, at Toyosu fish market in Tokyo

TOKYO (Reuters) -Japan's wholesale prices rose at their fastest annual pace in 13 years reflecting higher commodity costs, data showed on Thursday, a sign global inflationary pressures are pinching firms already struggling amid the coronavirus pandemic.

With companies seen slow in passing on the higher costs on to households, the uptick in wholesale inflation is unlikely to prod the Bank of Japan into withdrawing its massive stimulus any time soon, analysts say.

"We're seeing emerging signs of cost-push inflation. If this is not accompanied by rising wages, we could see Japanese consumers' purchasing power decline," said Mari Iwashita, chief market economist at Daiwa Securities.

The corporate goods price index (CGPI), which measures the prices companies charge each other for their goods, rose 4.9% in May from a year earlier, Bank of Japan data showed on Thursday, more than a median market forecast for a 4.5% increase.

It followed a 3.8% gain in April and was the biggest annual increase since September 2008, when a global spike in food and raw material costs pushed up a range of prices in Japan.

China also saw factory gate prices rise at their fastest annual pace in over 12 years, underscoring the tricky balance policymakers face in supporting their economies while keeping unwelcome inflationary pressures at bay.

The rise in raw material costs is particularly damaging for Japan, where state of emergency curbs to combat the pandemic are cooling consumption and making it difficult for retailers to charge households more for their goods.

Core consumer prices - the key benchmark the BOJ looks at in setting monetary policy - fell 0.1% in April from a year, marking the ninth consecutive month of decline.

"Rising commodities prices reflecting the global economic recovery is pushing up wholesale prices for a broad range of goods," Shigeru Shimizu, head of the BOJ's price statistics division, told a briefing on Japan's wholesale price data.

"The data shows companies are starting to pass on rising costs, though the gain in wholesale prices is driven more by external factors rather than domestic demand," he said.

Oil and coal prices jumped 53.5% in May, while prices of nonferrous metals were up 41.6%, as robust U.S. and Chinese demand boosted raw material costs, the BOJ data showed.

Wood and lumber prices were also up 9.7%, reflecting a shortage of raw material and rising demand across the world, Shimizu said.

Investors are increasingly worried pandemic-driven stimulus measures could supercharge inflation and force central banks to tighten policy, potentially curbing the recovery.

(Reporting by Leika Kihara; Editing by Christopher Cushing & Simon Cameron-Moore)

By Leika Kihara


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.44% 80.949 Delayed Quote.1.27%
BRITISH POUND / JAPANESE YEN (GBP/JPY) 0.33% 152.119 Delayed Quote.7.56%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) 0.17% 87.1 Delayed Quote.7.75%
DAIWA SECURITIES GROUP INC. -0.15% 581.3 End-of-day quote.23.68%
EURO / JAPANESE YEN (EUR/JPY) 0.09% 129.463 Delayed Quote.2.99%
INDIAN RUPEE / JAPANESE YEN (INR/JPY) 0.25% 1.472277 Delayed Quote.4.03%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) 0.60% 77.226 Delayed Quote.2.99%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.17% 109.166 Delayed Quote.5.87%
WTI -0.41% 70.14 Delayed Quote.48.11%
Latest news "Economy & Forex"
06:31aIndian shares close at record highs as financial, bank stocks rally
RE
06:27aWorld shares ride earnings to fresh high, dollar steady
RE
06:25aHuawei CFO's U.S. extradition case begins final weeks of hearings in Canadian court
RE
06:11aUK private-sector growth slows to weakest since March - PMI data
RE
05:56aRothschild-backed RIT co-leads funding for crypto platform Aspen Digital
RE
05:53aEuro zone business surged in July but price pressures and COVID weigh
RE
05:48aThai central bank keeps rate at record low, cuts GDP outlook amid COVID surge
RE
05:47aInvestors call for urgent action by steelmakers on carbon emissions
RE
05:43aSpurred by pandemic, Barcelona backs greener, car-free future
RE
05:40aToyota posts record profit, but wary on outlook
RE
Latest news "Economy & Forex"