Higher material costs aggravate Japan’s wholesale inflation
Wholesale inflation in Japan lingered close to its 13-year high in August. A strong global demand caused a continuous increase in raw material imports, which may force companies to raise prices for household consumers.
However, analysts expected a minimal price increase following COVID-19 lockdowns’ blow on domestic demand.
The corporate goods price index (CGPI) that calculates the costs companies charge each other for their goods and services climbed 5.5% in August from a year earlier, a little lower than a median forecast of 5.6% growth.
The reading pointed to a surge in six consecutive months and was marginally lower than July’s 5.6% gain, the highest increase rate in 13 years.
Shigeru Shimizu, head of the BOJ’s price statistics division, said strong demand for chemical, steel, and wood products resulted in price surge for the said materials.
Shimizu added that domestic wholesale inflation will keep on rising as the global economy continues to rebound due to higher vaccination rate. However, contagion resurgence casts doubts on the outlook.