Japan’s rising wholesale inflation heightens uncertainty on Bank of Japan’s rate hike timing
JAPAN’S wholesale inflation accelerated in October as renewed yen falls pushed up import costs for some goods, data showed on Wednesday (Nov 13), complicating the central bank’s decision on how soon to raise interest rates.
The corporate goods price index, which measures the price that companies charge each other for goods and services, rose 3.4 per cent in October from a year earlier, Bank of Japan (BOJ) data showed, above market forecasts for a 3 per cent gain.
It followed a 3.1 per cent increase in September.
The yen-based import price index fell 2.2 per cent year on year last month, less than the 2.5 per cent drop in September, the data showed. On a month-on-month basis, the index rose 3 per cent after falling 2.8 per cent in September.
A spike in the price of rice, coupled with the increasing cost of non-ferrous metals, food and oil, pushed up overall wholesale inflation, the data showed, a sign companies remained under pressure from rising raw material costs.
The BOJ ended negative interest rates in March and raised short-term interest rates to 0.25 per cent in July on the view Japan was making progress towards sustainably achieving its 2 per cent inflation target.
BOJ governor Kazuo Ueda has stressed the bank’s readiness to raise interest rates again if inflation becomes driven more by robust domestic demand and higher wages, rather than rising raw material costs. REUTERS
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