Japan Wholesale Prices:

https://mainichi.jp/english/articles/20200312/p2g/00m/0bu/054000c

Article:

TOKYO (Kyodo) -- Japan's wholesale prices rose 0.8 percent in February from a year earlier, but gains slowed due to the new coronavirus outbreak, the Bank of Japan said Thursday.

The growth weakened from a revised 1.5 percent climb recorded in January due largely to falling crude oil prices in the reporting month following the spread of the pneumonia-causing virus that originated in China.

The prices of goods traded among companies increased from the previous year for the fourth straight month. Excluding the impact of a consumption tax hike to 10 percent from 8 percent on Oct. 1, the prices fell 0.8 percent, the first decline in two months.

Comments and Ideas:

The increase in wholesale prices doesn't always transfer to an increase in consumer prices. Yes there might be some "passing on" to other businesses in the supply chain or and then on to consumers, but it doesn't always happen.

The volatility of oil prices is always a concern, especially now if there really is an oil war between Saudi Arabia and Russia.

Again whether B2B or B2C, an increase in prices might not transfer or be passed on to the next level. Sometimes companies will just "hold the line" meaning the try to maintain profits as is and not increase prices to B2B or B2C customers all the time.

Article:

"In addition to the impact of the coronavirus outbreak, a recent plunge in crude oil prices may further exert influence on prices in the coming months," a BOJ official said at a press briefing, adding the central bank will closely monitor developments.

By item, prices for oil and coal products gained 1.6 percent from a year earlier, but the increase slowed from a revised 9.0 percent in January. Scrap and waste prices plummeted 22.5 percent due to weakening demand in overseas markets.

Prices for pulp and paper products rose 3.3 percent, and ceramic, stone and clay product prices increased 3.5 percent due to rising material costs, respectively.

Import prices dropped 1.8 percent while export prices decreased 2.1 percent from a year earlier, both in yen terms.

Comments and Ideas:

Oil prices have been very irrational recently as again Saudi Arabia and Russia decide what they really want to do in the global oil market.

And oil products are seeing the affects of the so-called price war. The idea of scrap and waste product prices decreasing of course might be related to the emphasis on global changes and globally countries are re-thinking the waste product business/markets as being relevant or reliable or even profitable now.

The increases in prices for paper products is no surprise due to so-called hording that took place in Japan in January and February, with consumers thinking the paper products were made in China and there might be a shortage, while in reality over 90% of most paper products are not made in China but Japan, for the Japanese market.

The drop in import prices might be somewhat related to products coming in from China and or the lack of demand related to some products from China. For export prices, as global trade is trending down, the demand for some export prices might be dropping.

But then since these are in yen terms, it could be nothing more than the volatility of the currency exchange market, which has not quite recently.

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