Japan's wholesale prices rise 9.0% in Nov., sharpest rise on record

© Kyodo News

Wholesale prices in Japan jumped 9.0 percent in November from a year earlier, marking the steepest gain on record, boosted by higher energy costs and a weak yen, Bank of Japan data showed Friday.

The prices of goods traded between companies gained for the ninth straight month, underscoring continued commodity inflation at a time of weak consumer demand after the economy took a hit from the COVID-19 pandemic.

The 9.0 percent year-on-year rise is the sharpest since comparable data became available in January 1981, following a revised 8.3 percent increase in October, the BOJ said.

Recent higher wholesale prices have yet to fully affect consumer prices in Japan where accelerating inflation is not a pressing issue, bolstering the case for the BOJ to retain its monetary easing with its 2 percent target still far off.

Resource-poor Japan is susceptible to swings in crude oil and other energy prices as it relies on imports. The yen's weakness also inflates import costs, though it is seen as a boon to exporters whose overseas profits are boosted by it.

Prices of petroleum and coal products surged 49.3 percent in November from a year ago, while those of lumber and wood products jumped 58.9 percent, reflecting higher demand as economic activity gained traction. Nonferrous metal prices gained 32.8 percent.

Japanese companies are increasingly facing pressure to pass on higher costs to consumers by raising prices even though they tend to absorb them rather than hiking prices for fear of hurting consumer demand.

Gasoline and kerosene prices are at high levels heading into winter when energy demand increases and some food companies have announced price hikes to pass on rising raw material costs.

Import prices gained 44.3 percent, the sharpest gain since January 1981, while those of exports were up 15.0 percent, both in yen terms.

BOJ Governor Haruhiko Kuroda has said the yen's recent weakness is positive for the Japanese economy, underlining its profit-boosting effect on exporters and firms with overseas subsidiaries.