Corporate goods prices in Japan witnessed a surge, driven primarily by agricultural products and utilities and reaching the highest pace in 16 months. The data confirms intensifying inflationary stress in the economy, reinforcing the Bank of Japan’s (BOJ) path towards policy normalization.
As reported by BOJ on Wednesday, input prices for Japanese companies escalated by 3.7% in November year-on-year, surpassing all predictions made by the 25 economists surveyed by Bloomberg.
The report indicates enduring pressure on firms to shift costs onto consumers, aiding the inflation to permeate more expansively throughout the economy.
Analysts predict a hike in the BOJ’s benchmark interest rate either on December 19 or in January. It is anticipated that the BOJ will assess all associated economic figures prior to next week’s decision, inclusive of its Tankan survey on business sentiment slated for release on Friday.
In addition, the recently revised GDP figures for Q3 have majorly demonstrated the economy’s ongoing moderate recovery. The disclosed figures show a 1.2% reduction in yen-denominated expenses for imported materials and a 2.2% augmentation in yen terms for exported materials.
