Japan Wholesale Prices:

 https://mainichi.jp/english/articles/20210412/p2g/00m/0bu/038000c 

Article:

TOKYO (Kyodo) -- Japan's wholesale prices rose 1.0 percent from a year earlier in March for the first increase in 13 months, reflecting higher crude oil prices and a global economic recovery from the coronavirus pandemic, the Bank of Japan said Monday.

The prices of goods traded between companies last showed an on-year rise in February 2020, but remained below the central bank's 2 percent inflation target. The latest increase followed a 0.6 percent decline in February.

Ideas:

It's always important to remember there are many variables related to the increase in prices.

But the two main variables might be an increase in demand, in which suppliers might increase prices and buyers are more willing to buy and a possible increase in prices related to an increase costs of the supplier and the supplier might pass the increase on to the buyer.

The central bank's 2 percent inflation target is a good idea, but maybe it should not so important during the pandemic period.,

It might be a better idea to make sure as many businesses as possible survive the pandemic and then after the pandemic go back look at the inflation target again.

There are still too many businesses that need help before the inflation target should be a priority again.

Article:

By item, prices for oil and coal products gained 9.8 percent following a revised 6.0 percent fall in the previous month. Nonferrous metal prices jumped 28.7 percent due to strong demand in China, the central bank said.

Prices for scrap metal surged 63.9 percent, pushed up by robust demand from overseas.

"A pickup in prices has been driven by recoveries in the U.S. and Chinese economies, but demand in Japan remains weak," said a BOJ official.

Ideas:

As the Chinese and US economies continue to improve, demand for Japanese products, both merchandise and intermediate good will continue to grow.

Oil and coal products are very much elastic price products or more specifically very much volatile price products, meaning they are always changing and not so stable.

Companies need to be aware and prepare for the ups and downs of the price of oil as it changes a lot sometimes.

Demand in Japan will continue to be weak until consumers feel good about the economy and they feel good enough to spend at pre-pandemic levels.

But consumer spending has always been a target and concern of the Japan central bank.

As consumer spending might make up as much as 50 percent of Japan's GDP, its a concern if consumers are not spending at their potential and or not at a level that is good for the economy.

An economy needs a certain level of flow or economic activity in it, and consumer spending is a big part of it.

If consumers, have the ability, at a reasonable level to spend, with saving too, and they aren't spending to due worries about the future, about jobs, about families, or course now the pandemic, it has an affect on the overall economy.

And then add in the aging factor as Japan and South Korea are number 1 and 2 number in the increase in those who are ageing faster than any other country, and add in the fact that those in the 65+ age groups tend to spend less than the 20-65 age groups.

Article:

The rise in prices in March also reflected a year-earlier plunge in crude oil prices and the economic downturn around the world in the early stage of the pandemic.

"It is too early to say demand in Japan has returned to the level before the outset of the pandemic," the BOJ official added.

Electricity, gas and water bills fell 10.2 percent.

Import prices rose 5.6 percent from a year earlier while export prices climbed 5.5 percent, both in yen terms.

Ideas:

Again oil prices are very volatile meaning they can go up and down very easily during the year.

Households and consumers might like the fall in commodity prices such as electricity, gas, and water bills but the suppliers, the companies that provide the commodities might not like it.

There are always positives and negatives depending if you are supplier or a buyer.

Overall consume demand might not reach pre-pandemic levels until the end of year, as more citizens become vaccinated and begin to see things around them greatly improve.

Supply chain challenges might have something do to with the increase in import and exports prices, as supply chains get back to normal operations.

Have a nice day and be safe!