Corporate profits

Wholesale inflation in Japan skyrockets, squeezing corporate profits

Band Leika Kihara

TOKYO, October 12 (Reuters)Wholesale prices in Japan jumped 6.3% in September from a year earlier as commodity costs continued to rise, data showed Tuesday, a sign that global commodity inflation is weighing on business results.

The rise in the Business Goods Price Index (CGPI), which measures the price that businesses charge for their goods and services, exceeded a median market forecast for a gain of 5.9% and fell. accelerated from a revised 5.8% increase in August.

Domestic prices for finished goods, which loosely track the consumer price index, rose 1.8% from a year earlier, according to data from the Bank of Japan.

The rise in the ICPC was due to rising prices for a wide range of raw materials, including wood, fuel and non-ferrous metals, the data showed, while companies were not in able to fully pass the increased costs on to consumers due to weak demand.

The Japanese economy is gradually recovering on the back of robust external demand, but rising input costs, supply constraints and weak consumption have clouded the outlook.

Weak household spending has kept consumer inflation around zero in Japan, unlike other large economies which have seen price spikes due to strong demand and bottlenecks in the economy. offer.

(Reporting by Leika Kihara; editing by Richard Pullin)

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