By Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s wholesale prices likely accelerated in June, a Reuters poll showed on Friday, reflecting a combination of a weaker yen, higher import bills for raw materials and rising transport costs piling cost-based inflationary pressures on the trade-dependent economy.
Further data is expected next week showing that orders for core machinery rebounded in May from the previous month, according to the survey, which would be a source of relief for policymakers concerned about the outlook for capital spending.
Japan’s corporate goods price index (CGPI), a gauge of the prices companies charge each other, likely rose 2.9 percent in June from a year earlier, accelerating from 2.4 percent in the previous month, the survey of 17 economists showed.
Inflation data will be closely watched by the central bank, which raised interest rates for the first time since 2007 in March and decided last month to reduce its purchases of government debt as a step toward normalizing monetary policy.
“In addition to the weakening yen, other commodity prices have rebounded in early spring, which will now put upward pressure on import prices, also extending to energy-related industrial products and materials,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Logistics constraints caused by the Middle East crisis and domestic restrictions on truck drivers’ working hours are also driving up transport costs, Minami said.
Core machinery orders, a leading indicator of capital spending, likely rose 0.8% month-on-month in May, recovering somewhat from a 2.9% drop in April, the survey showed.
The Bank of Japan will release the headline consumer price index (CGPI) data at 8:50 a.m. on July 10 (23:50 GMT, July 9). The machinery orders data, a volatile data series that serves as a leading indicator of capital spending for the next six to nine months, will be released at 8:50 a.m. on July 11 (23:50 GMT, July 10).
Meanwhile, the Finance Ministry’s current account data, to be released on July 8 at 8:50 a.m. (July 7, 2350 GMT), is expected to show a surplus of 2.4539 trillion yen ($15.28 billion) in May, up from a surplus of 2.0505 trillion yen in the previous month.
($1 = 160.6200 yen)