Whole inflation in Japan advanced in February at the fastest annual pace in four decades amid rising fuel cots. However, Japan being dependent on import oil was already facing inflation headwinds before the Ukraine-Russia war.
According to Bank of Japan, the corporate good price index (CGPI) which measures price companies charge to each other jumped 9.3% in February from the same period earlier. The increase marks the fastest annual pace increase since 1981.
The recent war driven spike in good prices from oil to metals to grains will likely keep pushing up wholesale prices in a fresh hit to Japan’s resource-poor economy, which is heavily reliant on imported raw material.
“Even if the war in Ukraine ends, sanctions against Russia will remain and keep prices high mainly for fuel,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute as reported by Reuters.
“The rising inflationary pressure adds to pain for Japan’s consumption, which was already weak compared to that of Western economies, and may delay the country’s recovery,” he said.
