Reuters-By Tetsushi Kajimoto
TOKYO, Oct 13 (Reuters) – Japanese corporate goods prices grew the most in five months in September, Bank of Japan data showed on Thursday, highlighting the squeeze on business profits from persistently strong wholesale inflation.
The 9.7% year-on-year rise in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, was much bigger than a median market forecast for a 8.8% increase, BOJ data showed. JPCGPY=ECI
It was the biggest annual increase since a 9.8% rise registered in April, underlining the stiff margin pressure facing businesses as many of them struggle to pass on the costs to consumers.
A weak yen, which inflates the cost of imports, has exacerbated already high wholesale inflation from a global surge in commodity prices.
That combination has driven the index, at 116.3, to a record high since the survey began in 1960. Electricity bills for business and urban gas utility were the main contributors to the uptick in costs, reflecting rises in fuel costs for the second quarter.
The month-on-month input cost pressure also remained strong, with wholesale prices up 0.7% in September from August, when it increased 0.4%.
The yen-based import price index rose 48.0% year-on-year in September, after a revised 43.2 in August and a revised 49.2% in July, the data showed.
Japan’s core consumer inflation hit 2.8% in August, the fastest annual pace in 21 years, underscoring the rising cost of living with wage growth lagging far behind.
The nation’s economy grew more than initially reported in the second quarter, as the lifting of local COVID-19 restrictions boosted consumer and business spending.
However, given the moderate consumer inflation rate compared with many other advanced nations, the central bank has vowed to keep interest rates ultra-low to revive a fragile economy, remaining an outlier in a global tide of monetary policy tightening.
Reporting by Tetsushi Kajimoto Editing by Shri Navaratnam
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