Nov. Corporate Prices Up 9%... Largest Increase in 41 Years

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Japan's corporate goods price index rose sharply for the second consecutive month.

The corporate goods price index is an indicator showing the price trends of goods traded by companies.

On the 10th, the Bank of Japan announced that the corporate goods price index for November this year recorded 108.7 (preliminary figure), up 9.0% compared to the same month last year, marking the largest increase in about 41 years since December 1980 (10.4%) when the oil shock occurred.

Japan's corporate goods price index also rose 8.3% (revised figure) year-on-year in October.

The sharp rise in this index for two consecutive months is due to the increase in major international commodity prices such as crude oil and the sharp rise in import prices caused by the weak yen.

Import prices in November rose 35.7% based on contract currencies such as the dollar, but when converted to yen, the increase rate was even higher at 44.3%.

Japan's corporate goods price index showed a downward trend year-on-year at the beginning of this year but turned upward from March and has been rising for nine consecutive months.

By item, the rise in petroleum and coal products, including gasoline and diesel which have a significant impact on overall price trends, was prominent.

The year-on-year increase rate of petroleum and coal products in November this year reached 49.3%.

Among the 744 items for which price trends were announced, 453 items rose year-on-year, and 207 items fell, with the number of rising items increasing by 16 compared to the previous month.

The Nihon Keizai Shimbun forecasted, "The rise in corporate goods prices is spreading to a wide range of sectors including food and beverages," and added, "Due to the prolonged COVID-19 situation, the recovery of consumer demand is slowing, making it difficult to reflect the increase in raw material costs in product selling prices, which will likely reduce corporate profitability."

This content was produced with the assistance of AI translation services.