Japan’s April wholesale prices jump to rising materials …

Japan’s April wholesale prices jump to rising materials …

Japan’s wholesale prices rose at the fastest annual rate in six and a half years in April, data showed on Monday, a sign that rising energy and commodity costs are squeezing corporate profits.

Whether the COVID-19 pandemic weighs heavily on domestic consumption, helping companies pass higher costs on to households and helping central banks reach their elusive 2% inflation target, analysts said. I’m not sure about it.

“This rise is mainly due to strong global demand pushing up commodity prices,” said Shigeru Shimizu, director of the Bank of Japan’s price statistics department. He added that the price has been rising only moderately.

According to data from the Bank of Japan, the Corporate Price Index (CGPI), which measures prices of goods and services in April, rose 3.6% year-on-year, above the median market forecast of 3.1%.

The rise after a 1.2% increase in March was the fastest-paced rise since September 2014, partly swelled by the underlying effects of last year’s pandemic-related plunge.

Data show that the rise in April was primarily due to higher commodity costs, with petroleum product prices up 39.3% year-on-year and non-ferrous metal prices up 35.2%.

Timber and timber product prices rose 4.7% as a sign that the impact of rising US housing demand is widespread worldwide.

Of the 744 items in the index, 339 items increased in price, while 289 items decreased in price from the same period of the previous year.

The number of parts that went up in price exceeded the number of parts that went down for the first time in seven months.

Japanese companies are taking time to pass on higher costs to consumers who are sensitive to rising prices due to slow wage growth. That has hampered the BOJ’s efforts to raise consumer inflation to its target of 2%.

The central bank’s challenge is exacerbated by Japan’s struggle to contain the pandemic. According to a Reuters poll, the world’s third-largest economy is set to grow much slower than expected this quarter due to an extended state of emergency to combat the recurrence of infectious diseases. ..

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