Wholesale prices in Japan rose 9.0% in August from a year earlier, matching the annual pace of growth in July, data showed on Tuesday, signaling that persistently high raw material costs continue to weigh on corporate margins.
The rise in the Business Goods Price Index (CGPI), which measures the price companies charge themselves for their goods and services, was broadly in line with median market forecasts for an 8.9% increase, according to Bank of Japan (BOJ) data.
The index, at 115.1, hit a record high for the fifth consecutive month, a sign that Japan continues to feel the impact of rising global commodity prices.
While recent declines in crude oil and global raw material costs have released some pressure on fuel and scrap prices, prices have risen for a wide range of items that more directly affect retailers such as utility bills and electronic devices, according to the data.
Reflecting the easing of pressure on inputs, wholesale prices rose only 0.2% in August from the previous month, slower than the revised 0.7% m/m rise recorded in July. .
The yen-based import price index rose 42.5% in August from a year earlier, after a revised increase of 49.1% in July, the data showed.
A weak yen inflated the cost of importing already rising commodity prices, weighing on corporate profits and forcing a growing number of companies to raise prices.
Core consumer inflation in Japan hit 2.4% in July to mark the fastest annual pace in 7½ years, adding to the cost of living for households that have yet to register a significant wage gains.
But with inflation still modest compared to many other advanced countries and a fragile economy, the BOJ has pledged to keep interest rates extremely low and remain an outlier in a global wave of monetary policy tightening. .
Japan’s economy grew at an annualized 2.2% in April-June, recording a slower-than-expected rebound from a COVID-induced crisis, as a resurgence in infections, supply constraints and rising raw material costs weigh on consumption and production.
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