Japan Wholesale Prices Surged 7.3% Last Year, Fastest On Record

Japan's wholesale prices jumped 7.3 percent in the year to March 2022 from a year earlier, the fastest pace on record, driven by surging crude oil and commodity prices amid an economic recovery from the COVID-19 pandemic and Russia's invasion of Ukraine, Bank of Japan data showed Tuesday, Mainichi Shimbun reported.

Photo Insert: Japan's Ginza district is famous for shopping and entertainment.

Amplified by a weak yen, the record rise since comparable data became available in 1981 came after a 1.4 percent fall in fiscal 2020. It highlighted the strong impact of fluctuations in commodity prices on Japan, a major energy importer.

The depreciation of the yen boosted import prices for Japan by 32.7 percent from a year earlier. The figure compared with a 12.3 percent rise in export prices. Both numbers are in yen terms.

In March alone, wholesale prices, or the price of goods traded between companies, rose 9.5 percent, marking the second-fastest pace on record after a revised 9.7 percent gain in February. They were up for the 13th straight month, the BOJ data showed.

Surging crude oil and commodity prices, accelerated by supply concerns following the Russian aggression since late February, have maintained the upward pressure on prices. Companies have been passing on the increased costs to consumers but they face a difficult balancing act in ensuring their profitability without hurting consumer demand.

With its powerful monetary easing helping to weaken the yen, the BOJ has come under growing pressure to convince corporate management and consumers of the need to leave its policy unchanged while its US and European peers are moving toward policy normalization, a factor making the yen weaker. The Japanese currency has slipped to a nearly seven-year low against the US dollar.

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