May wholesale prices rise 4.9% yr vs f'cast 4.5% yr,
Rising costs pinch firms still reeling from the pandemic hit.
Tokyo, June 10 - Japan's wholesale prices rose 4.9% in May from a year earlier to mark the biggest increase in 13 years, data showed on Thursday, indicating that higher commodity costs could slow companies emerging from the COVID 19 pain.
The gain in the Purchasing Index, which measures the prices companies charge each other for their goods, was more than market forecasts for a 4.5% increase and followed a 3.8% rise in April, Bank of Japan data showed.
It was the biggest annual increase since September 2008.
Rising commodities prices reflecting the global economic recovery are pushing up wholesale prices for a broad range of goods, told Shigeru Shimizu, head of the BOJ. Price statistics division, a briefing.
The data shows companies are starting to pass on rising costs, though the gain in wholesale prices is driven more by external factors than domestic demand, he said.
Oil and coal prices increased in May from a year earlier, while the prices of nonferrous metals were 41.6% in contrast as robust US and Chinese demand boosted raw material costs, reports showed.
Wood and lumber prices were also increasing by 9.7%, reflecting a shortage of raw material and rising demand in other countries, Shimizu said.
Rising costs would reduce margins for many companies including retailers that were still reeling from the state-of-emergency curbs implemented to prevent the spread of the pandemic, clouding the outlook for Japan's fragile economic recovery.
On the other hand, companies have been careful to pass on the higher costs to households. The basic consumer price fell in April from a year, marking the ninth consecutive month of decline - a sign weak domestic demand discouraged firms from raising prices. What are the best ways of getting more information about an opportunity and the reasons for investing in your pet business?