© Reuters. FILE PHOTO: A woman looks at items at a store in Tokyo, Japan, March 24, 2023. REUTERS/Androniki Christodoulou/File Photo
Written by Laika Kihara
TOKYO (Reuters) – Wholesale price inflation in Japan slowed below 1 percent for the first time in just over two-and-a-half years, data showed on Monday, a sign that cost pressures are pushing up prices of a wide range of goods. It started to fade.
The Corporate Goods Price Index (CGPI), which measures the prices companies charge each other for their goods and services, rose 0.8% in October from a year earlier, roughly in line with the average market expectation for a 0.9% increase but down significantly from 2.2%. % increase in September.
The data showed that this represented the tenth consecutive month in which wholesale inflation slowed, with the year-on-year growth rate falling below 1% for the first time since February 2021.
The data showed that the slowdown was due to lower prices for timber, chemicals and steel products, highlighting the impact of lower global commodity costs.
The sharp rise in wholesale inflation has prompted many Japanese companies to pass on higher costs to households, a trend that prompted the Bank of Japan to raise its inflation forecasts in its quarterly outlook issued in October.
But the Bank of Japan said recent inflation caused by rising costs must be replaced by higher prices driven more by strong domestic demand, and accompanied by wage growth, so that it can consider ending ultra-low interest rates.