Wholesale infaltion in Japan stayed remained near record-high level in March amid crisis in Ukraine and a weak yen lead to furry of fuel and raw material costs.
The rising wholesale prices will add to consumer inflation above central bank’s target rate of 2% and further strain the economy that is yet to fully recover from the COVID-19 pandemic.
The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 9.5% in March from a year earlier, official data showed.
That followed a revised 9.7% spike in February, which was the fastest pace on record, and exceeded a median market forecast for a 9.3% gain. The March index, at 112.0, was the highest level since December 1982, the Bank of Japan (BOJ) said.
“With raw material costs rising so much, companies won’t be able to make money unless they raise prices. The days of discount war are over,” said Takeshi Minami, chief economist at Norinchukin Research Institute as reported by Reuters.
He added, “Core consumer inflation may accelerate to around 2.5% later this year and stay above 2% for longer than initially expected, weighing on consumption and the economy.
According to official data, the yen-based import price index jumped 33.4% in March from the same period in previous year, underscoring the recent declines in yen added to inflation through rising cost of imports for Japanese firms.
