Japan’s wholesale inflation slowed for a fifth consecutive month in May because of sliding fuel and commodity prices, data showed on Monday, a sign cost-push pressure that has driven up consumer inflation may be subsiding.
The data underscores the central bank’s view that consumer inflation will slow in coming months as global commodity prices slide from last year’s peak levels.
The Bank of Japan (BOJ) is expected to maintain ultra-loose policy this week and stick with its forecast for a moderate economic recovery, as robust corporate and household spending cushion the blow from slowing overseas demand, sources have told Reuters.
The corporate goods price index (CGPI), which measures the price companies charge each other for goods and services, rose 5.1% in May compared with a year earlier, BOJ data showed, slower than the median market forecast for a 5.5% gain.
The rise came after a revised 5.9% increase in April and was well off the peak of 10.6% hit in December last year, as prices of electricity, fuel, nonferrous metals and chemical goods fell, data showed.
But prices of beverage and food goods rose 7.9% in May from a year earlier and those of electric equipment were up 5.5%, the data showed, a sign cost pressures for sectors close to households such as retailers and restaurants were showing little signs of abating.
Japan’s core consumer inflation hit 3.4% in April as companies continued to raise prices, casting doubt on the BOJ’s view that inflation will slowly move back below 2% toward the latter half of the current fiscal year ending in March 2024.