Japan's Wholesale Inflation Hits 4%, Keeps Bank of Japan Under Pressure

• Japan's wholesale inflation hit 4.0% in April as companies continued to pass on rising raw material and labour costs, underscoring price pressure that will likely keep the central bank on course to raise interest rates further.

• There was little impact seen from U.S. President Donald's sweeping tariffs announced on April 2, in part due to a 90-day pause set by Washington, with many firms yet to finalise their pricing strategy, a Bank of Japan (BOJ) official said in a briefing on the data released on Wednesday.

• The year-on-year increase in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, matched a median market forecast and slowed from a revised 4.3% annual increase in March.

• The index, at 126.3, hit a fresh record high for the 8th straight month, in a sign that lingering inflationary pressures are feeding into higher consumer prices with some lag. The yen-based import price index fell 7.2% in April from a year earlier after a revised 2.4% drop in March, a sign the currency's rebound was taking pressure off import costs.

• Food and beverage prices rose 3.6% in April from a year earlier, faster than a 3.4% gain in March. Agricultural goods prices also spiked 42.2% in April after a 39.1% rise in the previous month.

• The BOJ ended a decade-long, massive stimulus last year and raised short-term interest rates to 0.5% in January. While it has signalled readiness to raise rates further, the economic fallout from Trump's tariffs has complicated its decision on the next rate-hike timing. Core consumer inflation, which is the key indicator the BOJ uses to set monetary policy, hit 3.2% in March on persistent rises in food costs, staying above the central bank's 2% target for three years.

(Source: Reuters)