Monday September 01, 2008

Japan wholesale inflation rate hits 7.1% in Jul 2008, a 27-year record high

bloomberg.com :

Japan's wholesale inflation rate accelerated to a 27-year high in July, squeezing corporate profits, increasing bankruptcies and threatening the economy's longest postwar expansion. Producer prices, the costs companies pay for energy and raw materials, climbed 7.1% from a year earlier, the Bank of Japan said. More businesses failed because of rising fuel and raw material costs in the first half of this year than for all of 2007. "Even though oil prices have been coming down in recent weeks, companies will keep trying to raise prices because they've made up for only a fraction of the cost increases they've suffered," said Azusa Kato, an economist at BNP Paribas in Tokyo. Faster inflation is unlikely to prompt the Bank of Japan to raise interest rates as the economy teeters on the verge of its first recession since 2001.

- Now that's one economist who has got it right, as the impact of $100+ oil is still filtering through the global economy. Japan is a special and peculiar case for inflation watchers like myself, seeing how it has come off a decade-long period of deflation and its pendulum is undoubtedly starting to swing the other way again toward inflation. All you have to do is to look in Japan's direction to see what's in store : an increasingly inflationary future.

See also :

1. Japan shows first inflation signs as core CPI rises 0.1%
2. Japan inflation at fastest pace in more than 9 years
3. Japan wholesale inflation hits 27-year high of 3.9% in Mar 2008
4. Japan core inflation rate hits 10-year high of 1.0% in Feb 2008

(2008-09-01 20:39:59 SGT) [Biz] Permalink

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