Wholesale inflation in Japan rose in May at the fastest annual pace in nine months, data released today, a sign that yen weakness is adding upward pressure on prices by pushing up the cost of raw material imports .
Notably, the Corporate Goods Price Index (CGPI), which measures the prices companies charge each other for their goods and services, rose 2.4% in May from a year earlier, exceeding the median forecast of the market for a gain of 2.0%. It followed a 1.1% increase in April, accelerating for a fourth consecutive month, with the increase led by rising prices of utilities, oil and chemicals as well as nonferrous metals, as the data shows.
Import prices increased by 0.9% on a monthly basis and decreased by 3% on a year-on-year basis. Export prices instead rose by 0.1% on a monthly basis and by 1.9% on an annual basis.
Data will likely be among the factors that the board of BOJ will review during the two-day policy meeting that ends on Friday. The central bank is expected to keep its short-term interest rate target unchanged in a range of 0% to 0.1%. In March the BOJ he ended eight years of negative interest rates and other holdovers from his radical stimulus program, believing the prospects of inflation staying sustainably around his 2% inflation target were growing.
PHOTO: SHUTTERSTOCK
