January 16, 2018 11:31 am JST

Japan's wholesale prices in 2017 log first rise in 3 years

Rising oil and coal prices pushed up Japan's wholesale prices.

TOKYO (Kyodo) -- Japan's wholesale prices rose 2.4 percent in 2017, increasing on an annual basis for the first time in three years amid soaring energy costs, the Bank of Japan said Tuesday.

The index of goods prices traded among companies stood at 98.8 against the 2015 base of 100, according to preliminary data, adding pressure on consumer inflation to pick up toward the central bank's ambitious 2 percent target.

Oil and coal prices jumped 18.2 percent as a production cut by resource-rich countries pushed up the crude oil market, while utilities gained 4.0 percent.

Nonferrous metals such as copper and iron rose 12.6 percent on demand from the United States and China, while steel was up 9.2 percent as construction in Japan ramped up ahead of the 2020 Tokyo Olympics.

Among decliners, electrical machinery fell 1.6 percent while information and communications equipment such as mobile phones fell 1.1 percent.

A BOJ official said in a press briefing the economic policies of U.S. President Donald Trump and moves on currency and commodity markets would be in focus going forward as possible movers of wholesale prices.

Export prices advanced 5.4 percent from a year earlier while import prices gained 10.9 percent, both in yen terms.

In December, wholesale prices rose 3.1 percent year-on-year for the 12th consecutive month of gains, the longest stretch since a 24-month run through March 2015.

However, the upward trend in wholesale prices has been slow to translate to inflation gaining momentum toward the BOJ's 2 percent target, as businesses remain wary of raising the prices of their products and services for fear of chasing away frugal consumers.

Core consumer prices, minus volatile fresh food prices, rose just 0.9 percent in November from a year earlier.

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