UPDATE 2-Japan’s wholesale inflation hits 40-year high as fuel costs spike

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*Wholesale prices higher than expected

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* October yen-based wholesale import price 38.0% yr/yr

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* Poll shows warm to idea of ​​passing costs on to more firms (adds milestone, analyst quotes)

TOKYO, Nov 11 (Businesshala) – Japan’s wholesale inflation hit a four-decade high in October, after a similar hike in China’s factory gate prices led to supply constraints and rising commodity costs threatening Asian corporate profits. .

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Rising cost pressures, coupled with a weaker yen, which pushes up the price of imported goods, add pain to the world’s third-largest economy as it emerges from a consumer slowdown caused by the pandemic.

“Rising costs are certainly negative for corporate profits,” said Atsushi Takeda, chief economist at the Itochu Economic Research Institute. “If the economy continues to improve, companies may at some point be able to pass on the cost (to consumers),” he said.

The Corporate Goods Price Index (CGPI), which measures the prices that companies charge each other for their goods and services, rose 8.0% in October from a year ago, for a 7.0% gain from market expectations, Bank of Data from Japan showed on Thursday.

The increase, which exceeded the revised 6.4% increase in September, was the fastest pace since comparable data became available in January 1981.

Wholesale prices rose for a range of goods, including fuel, which rose 44.5% in October from a year earlier, and wood goods, which saw prices rise by 57.0%.

An index measuring yen-based wholesale import prices jumped a record 38.0% in October from a year earlier, higher than a revised 32.2% gain in September, following the recent yen’s decline in already high raw material costs for companies. was increasing.

Japanese companies have so far been cautious about passing on high costs to consumers, on concerns that cost-sensitive households may curtail spending. It has raised core consumer prices by just 0.1% in September from a year ago.

However, a small majority of Japanese firms say they plan to or pass on climbing commodity costs to customers, a Businesshala poll showed, a sign that inflationary pressures are on the rise.

Commodity inflation has affected countries around the world. China’s factory gate inflation hit a 26-year high in October as coal prices rose amid a power crunch in the country’s industrial sector, further narrowing profit margins for producers and heightened inflation concerns.

In the United States, consumer prices posted their biggest increase in 31 years in October as Americans paid more for gasoline and food, amid signs that inflation could remain at uncomfortably high levels through 2022. (Reporting by Leika Kihara; Additional reporting by Kantaro Komiya and Daniel Lusync; Editing by Sam Holmes)

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