Japan’s annual wholesale prices rose at a faster-than-expected pace last month, data showed yesterday, adding to recent signs of inflationary pressure that could force the central bank to raise interest rates soon.
The 10.2 percent annual rise in the corporate goods price index, which measures the price companies charge each other for their goods and services, exceeded a median market forecast for a 9.5 percent gain, Bank of Japan (BOJ) data showed.
It followed a revised 9.7 percent increase in November last year.
Photo: Reuters
While global commodity prices slipped, companies continued to pass on past increases in raw material costs for goods such as auto parts and electricity equipment, a BOJ official briefing reporters on the data said.
The yen-based import price index rose 22.8 percent last month from a year earlier, slowing from a revised 28.0 percent gain in November, in a sign the currency’s recent sharp ascent helped temper the cost of importing fuel and raw material.
“While inflationary pressure from imports is easing, firms are still passing on rising input costs at home,” Norinchukin Research Institute chief economist Takeshi Minami said.
“But such price pressure will gradually weaken with commodity inflation peaking out, and major economies likely to stagnate in the first half of this year,” he said.
Last year, wholesale prices rose 9.7 percent on average from the previous year, hitting a record high since comparable data became available in 1981. It was much higher than a 4.6 percent gain in 2021.
Speculation is rampant in markets that the BOJ could soon phase out its massive monetary stimulus as rising inflation pushes up long-term interest rates, testing its resolve to defend a newly set 0.5 percent cap on the 10-year bond yield.
At a two-day policy meeting ending on tomorrow, the BOJ would likely raise its inflation forecasts and debate whether further steps are needed to address market distortions it sought to fix with last month’s surprise tweak to its yield control policy, sources have told reporters.
Data due out on Friday is expected to show Japan’s core consumer prices rose 4 percent last month, double the BOJ’s 2 percent target and a fresh 41-year high, in a sign of rising living costs for households, a Reuters poll showed.
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