September 10, 2008

Whole Inflation in Japan Dips

Japan's August wholesale prices rose 7.2 percent from the same month of last year, down slightly from July's 7.3 percent, a near 27-year high.

The high wholesale inflation resulted from rising oil and raw material costs, the Bank of Japan said Wednesday.

The prices, gauged by the central bank's corporate goods price index, stood at 112.1, up from the 2005 base of 100.

The August number compared with a market projection of 7.1 percent, Kyodo news service reported.

Prices for petroleum and coal products surged 43.3 percent in August from a year earlier, while iron and steel prices rose 28.6 percent, the report said.

"Following surges in crude oil and other resource prices, such costs have continued to be passed (to firms in the downstream)," a bank official said.

The good news was that the pace of growth of prices of energy and raw materials appeared to be slowing on a month-to-month basis.

The Kyodo report quoted private-sector economists that the nation's wholesale inflation rate is expected to peak in the July-September period with the recent drops in nonferrous material prices.