Japans wholesale inflation stays near record on Ukraine war, weak yen

div classBodysc17zpet90 cdBBJodivpBy Leika Kiharap

pTOKYO Reuters Japans wholesale inflation remained near recordhigh levels in March as the Ukraine crisis and a weak yen pushed up fuel and raw material costs, data showed on Tuesday, adding strains to the resourcepoor economy heavily reliant on imports.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pWhile rising wholesale prices will help accelerate consumer inflation toward the central banks elusive 2 target, it could hurt an economy still reeling from the coronavirus pandemic, analysts say.p

pThe corporate goods price index CGPI, which measures the price companies charge each other for their goods and services, rose 9.5 in March from a year earlier, data showed.p

pThat followed a revised 9.7 spike in February, which was the fastest pace on record, and exceeded a median market forecast for a 9.3 gain. The March index, at 112.0, was the highest level since December 1982, the Bank of Japan BOJ said.p

p“With raw material costs rising so much, companies wont be able to make money unless they raise prices. The days of discount war are over,” said Takeshi Minami, chief economist at Norinchukin Research Institute.p

p“Core consumer inflation may accelerate to around 2.5 later this year and stay above 2 for longer than initially expected, weighing on consumption and the economy,” he said.p

pThe yenbased import price index jumped 33.4 in March from a year earlier, the data showed, a sign the yens recent declines are inflating the cost of imports for Japanese firms.p

pJapanese companies have been slow in passing on rising costs to households as soft wage growth weighed on consumption, keeping consumer inflation well below the BOJs 2 target.p

pBut analysts expect core consumer inflation to accelerate around 2 from April due to surging fuel costs and the dissipating effect of past cellphone fee cuts.p

pThe rising inflationary pressure heightens the chance the BOJ will revise up its inflation forecast at its next quarterly review due April 28, analysts say. The banks current forecast is for core consumer inflation to hit 1.1 in the year that began in April.p

p Reporting by Leika Kihara Editing by Sam Holmesp

divdivdiv classBodysc17zpet90 cdBBJodivdivdiv