TOKYO -- Japan's corporate goods price index climbed 3% on the year in September as the momentum even carried over to final goods, whose prices grew at the fastest pace in three years and eight months.
The index, tracking prices at the producer and wholesale levels, rose the quickest in about nine years when the impacts of consumption tax hikes are excluded, Bank of Japan statistics released Thursday show. Final goods, including industrial machinery and food for restaurants, are important to lifting consumer prices.
Materials costs have been driven up by international market conditions, especially rising resource prices. But this has failed to translate to higher prices of final goods. Now, Japan's downstream deflation has finally given way.
Prices of domestic final goods rose 0.71% on the year in September. The resulting nine months of increases constituted the longest streak since a 12-month run from 2007 to 2008.
How much rising prices of final goods will influence the consumer price index is unclear. September's price growth for domestic final goods was driven mainly by products impacted by costlier crude oil as well as gasoline and liquefied natural gas. The number of products receiving price hikes due to greater demand or rising labor costs remains limited.
Although some companies are moving to raise prices -- such as Asahi Group Holdings deciding to charge commercial customers more for beer products -- price growth remains weak for industrial machinery and other goods as businesses stick to a cautious approach.