Japan’s wholesale inflation eases, goods close to consumers continue to rise

JAPAN’S wholesale inflation slowed for a fifth consecutive month in May because of sliding fuel and commodity prices, data showed on Monday (Jun 12), a sign cost-push pressure that has driven up consumer inflation may be subsiding.

The data underscores the central bank’s view that consumer inflation will slow in the coming months as global commodity prices slide from last year’s peak levels.

The Bank of Japan (BOJ) is expected to maintain an ultra-loose policy this week and stick with its forecast for a moderate economic recovery, as robust corporate and household spending cushion the blow from slowing overseas demand, sources have told Reuters.

The corporate goods price index (CGPI), which measures the price companies charge each other for goods and services, rose 5.1 per cent in May compared with a year earlier, BOJ data showed, slower than the median market forecast for a 5.5 per cent gain.

The rise came after a revised 5.9 per cent increase in April and was well off the peak of 10.6 per cent hit in December last year, as prices of electricity, fuel, nonferrous metals and chemical goods fell, data showed.

But prices of beverage and food goods rose 7.9 per cent in May from a year earlier and those of electric equipment were up 5.5 per cent, the data showed, a sign cost pressures for sectors close to households such as retailers and restaurants were showing little signs of abating.

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Japan’s core consumer inflation hit 3.4 per cent in April as companies continued to raise prices, casting doubt on the BOJ’s view that inflation will slowly move back below 2 per cent towards the latter half of the current fiscal year ending in March 2024. REUTERS