Japanese Firms Facing Strongest Cost Pressure Since 1980
(Bloomberg) -- A measure of costs for Japanese companies jumped the most since December 1980, adding further pressure on companies to consider raising prices for consumers.
Japan’s price index of corporate goods rose 9% in November from a year earlier as the pace of gains accelerated from the previous month, according to a report by the Bank of Japan on Friday.
Oil and coal prices were a big driver of the jump, with a 49.3% gain from a year ago.
Japanese companies are reluctant to push up their prices after decades of price weakness and deflation. While they try to absorb higher input costs over the short term, the continued gains are straining their ability to avoid pushing up their own prices.
Already some firms have opted to hike prices and take the possible hit of lost sales, rather than squeezing their margins further.
Consumer prices excluding fresh food edged up just 0.1% in October. While the low inflation figure partly reflects the resistance to raise prices, the gauge has also been held down by a government push for sharply lower mobile phone fees.
©2021 Bloomberg L.P.