Wholesale prices in Japan jumped 9.2 percent in June from a year earlier after import prices surged at the fastest pace on record due to the sharp drop in the yen, Bank of Japan data showed Tuesday.
Japan has seen the prices of goods traded between companies rising by 9 percent or more for the past six months, giving evidence that inflationary pressures are persisting as Russia's war in Ukraine sends energy, raw material and food prices sharply higher.
Wholesale prices marked the 16th straight month of year-on-year growth. The yen's recent depreciation to levels unseen in about two decades against the U.S. dollar also inflated import prices to the detriment of resource-poor Japan.
Import prices in yen terms soared 46.3 percent, the biggest gain since comparable data became available in 1981. The figure compares with a 19.1 percent gain in export prices, the BOJ said.
Prices or petroleum and coal products jumped 22.2 percent, while those of iron and steel gained 26.7 percent. Wood and lumper prices advanced 43.3 percent, though the pace of increase slowed from 57.2 percent in May, reflecting tight demand as economic activity picks up.
Electricity, city gas and water prices, which track energy prices such as crude oil and natural gas with a lag, rose 28.2 percent.
The rise in energy prices was limited by government subsidies to oil wholesalers to bring down the prices of gasoline and kerosene among other fuels. But the impact of higher energy prices overseas was still felt as Japan relies heavily on foreign energy to satisfy domestic needs.
"We have seen moves to pass on higher steel and energy prices in the machinery sector and raw material costs in the food and beverage industry," a BOJ official said.
"There appear to be many companies willing to raise prices further when they review their prices, such as in July and October," the official added.
Japanese companies -- both manufacturers and nonmanufacturers alike -- are feeling the impact of higher purchase prices.
According to the BOJ's Tankan business survey released earlier in the month, the reading for input costs among major manufacturers stood at the highest level in about four decades.
Japanese companies have been passing on higher costs by raising retail prices, with consumers increasingly struggling with the rising cost of living, a key issue in Sunday's House of Councillors election in which the ruling coalition clinched a sweeping victory.
The core consumer price index excluding volatile fresh food items rose 2.1 percent in April and May, a level above the BOJ's target of 2 percent.
Still, the central bank has cast doubt on the sustainability of inflation largely driven by higher energy and commodity prices, committing itself to powerful monetary easing.
The yen has fallen as the BOJ has stayed the course while the U.S. Federal Reserve has already started raising rates, facing the delicate balancing act of tamping down inflation without hurting economic growth. The European Central Bank is also expected to follow suit.