Japan’s Aug wholesale inflation slows as cost pressures ease

A woman looks at items at a shop in Tokyo, Japan, March 24, 2023. REUTERS/Androniki Christodoulou/File photo

TOKYO  -Japan’s annual wholesale inflation slowed in August for the eighth straight month, data showed on Wednesday, offering some relief for households and retailers hit by past sharp rises in raw material imports.

The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 3.2 percent in August from a year earlier, matching a median market forecast.

It slowed from a revised 3.4 percent rise in July, and is now off a peak 10.6 percent year-on-year surge hit in December last year, data by the Bank of Japan (BOJ) showed.

“While crude oil prices remain high and yen falls continue, wholesale inflation is slowing … and could post a year-on-year decline in the fourth quarter,” said Toru Suehiro, an economist at Daiwa Securities.

“The price declines seen for some goods can’t be ignored” as it could affect households’ perception of future price moves, he added.

Rising wholesale prices, driven by last year’s surge in global commodity costs and the weak yen, have pushed up Japan’s broader consumer inflation by prodding many firms to charge households more for their goods.

While consumer inflation has remained above the BOJ’s 2 percent target for more than a year, the central bank has stressed the need to keep ultra-loose monetary policy until such supply-driven rise in prices is replaced by an increase backed by domestic demand.