Japan’s Wholesale Inflation Slows for Fifth Month in May

Wholesale inflation in Japan rose at a slower pace for the fifth consecutive month in May as prices of fuel and commodities decreased, official data showed on Monday, suggesting cost-push pressure that has driven up consumer prices is possibly easing.

In May, the producer price index climbed 5.1% from a year earlier, the lowest annual pace since July 2021. This was also slightly lower than the 5.8% annual rate recorded in April. 

This supports the Bang of Japan’s expectation that consumer inflation will moderate in the coming months as a result of the recent decline in global commodity prices from their peak levels last year.

Despite the BOJ’s prediction that inflation will gradually decrease back below 2% toward the latter part of the current fiscal year ending in March 2024, core consumer inflation in Japan reached 3.4% in April as corporations continued raising prices.

According to Reuters’ sources, the central bank is anticipated to keep its ultra-loose policy in place this week and continue with its prediction for a mild economic recovery. This is because robust corporate and consumer spending offsets the impact of weakening outside demand.