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Japan wholesale prices seen rising under cost-push inflation pressure: Reuters poll

Published 2024-07-05, 12:54 a/m
© Reuters. FILE PHOTO: A man buys fish at a market in Tokyo, Japan March 3, 2023. REUTERS/Androniki Christodoulou/File Photo
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By Tetsushi Kajimoto

TOKYO (Reuters) - Japan's wholesale prices likely accelerated in June, a Reuters poll showed on Friday, reflecting a mix of a weak yen, higher commodity import bills and rising transportation costs piling up cost-push inflation pressures on the trade-reliant economy.

Separate data next week is expected to show core machinery orders rebounded in May from the previous month, according to the poll, which would be a source of relief for policymakers worried about the outlook for capital expenditure.

Japan's corporate goods price index (CGPI), a gauge of prices that firms charge each other, likely rose 2.9% in June from a year earlier, and accelerated from the prior month's 2.4%, the poll of 17 economists showed.

Inflation data will be scrutinised by the central bank, which in March raised interest rates for the first time since 2007, and decided last month to reduce its government debt buying as a step towards normalising monetary policy.

"On top of the yen weakening, crude oil and other commodity prices have rebounded early in spring, which will now heap upward pressure on import prices, spilling over energy and materials-related industrial products as well," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Restrictions on logistics caused by the Middle East crisis and domestic curbs on working hours for truck drivers are also driving up the costs of transportation, Minami said.

Core machinery orders, a leading indicator of capital expenditure, likely climbed 0.8% month-on-month in May, recovering somewhat from a 2.9% drop in April, according to the poll.

The Bank of Japan will release the CGPI data at 8:50 a.m. on July 10 (2350 GMT, July 9). The machinery orders data, a volatile data series that serves as a leading indicator of capital spending for the coming six to nine months, is due on 8:50 a.m. on July 11 (2350 GMT, July 10).

© Reuters. FILE PHOTO: A man buys fish at a market in Tokyo, Japan March 3, 2023. REUTERS/Androniki Christodoulou/File Photo

Separately, current account data from the Ministry of Finance due on July 8 at 8:50 a.m. (July 7, 2350 GMT) is expected to show a surplus of 2.4539 trillion yen ($15.28 billion) in May, versus the prior month's 2.0505 trillion yen surplus.

($1 = 160.6200 yen)

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