Japan Wholesale Prices:

 https://mainichi.jp/english/articles/20210812/p2g/00m/0bu/016000c

Article:

TOKYO (Kyodo) -- Wholesale prices in Japan jumped 5.6 percent in July from a year earlier, the fastest pace of increase in nearly 13 years, amid rising energy and commodity prices as economic activity picks up, Bank of Japan data showed Thursday.

The prices of goods traded between companies rose for the fifth straight month and steep year-on-year gains have been seen in recent months -- 5.0 percent in June and 5.1 percent in May. The latest figure represents the steepest rise since September 2008, according to the central bank.

Ideas:

Rising wholesales prices might not mean a rise on prices for consumers and some companies and wholesalers have said they are hesitant to "pass on" the increase in costs to those next in the supply chain and or regular consumers because demand in the Japanese economy is still not where it should be.

Rising energy prices are always a volatile situation, as some energy commodities are subject to fluctuations in global supply.

The prices of good trade between companies are probably easier to "pass on" than to end of user regular retail consumers, as again as demand is not where it should be at the moment, and whomever, knows they might be stuck with the increase in costs for the time being.

Article:

A weaker yen also led to higher raw material costs for companies, the data showed. Import prices surged 27.9 percent while those of exports gained 11.2 percent, both in yen terms.

Wholesale prices normally have a delayed effect on consumer prices. The BOJ is struggling to hit its 2 percent inflation target, measured in consumer prices, even as its U.S. and European peers are carefully monitoring rapid inflation.

Ideas:

Importers prefer a strong yen, which means they have to pay less for the imports from the EU or the US for example.

While exporters prefer a weak yen, as they can get more for their exports to the US or EU for example.

Wholesale prices might have a delayed effect as not all wholesalers will or can "pass on" the increased cost the next level especially if they know there is low consumer demand in the economy for their products.

The reason Japan is not reaching is inflation goal and or the reason for less consumer demand in Japan could be related, at the present, to the delayed virus vaccination process.

And or because the Bank of Japan since around 2014 has been trying to increase inflation to the 2 percent rate, the Japan economy, in its present structure, is unable to reach 2 percent. 

Most likely, even if there was not a pandemic, inflation would probably only reach 1 percent, if even that.

Japan, for example related to its structure, as has just been reported or mentioned in other reports, has a major challenge with working women who are working in jobs that are not at the level of their skills, and as such they are underemployed.

Unleash this group, give them jobs that match their career aspirations or their jobs skills and Japan just might reach that 2 percent inflation level.

But when you have a large part of society that is underemployed its can only have a negative affect on consumer demand as they are not making the salaries that they are trained for, and as such are not going to spend to their potential like they might do if they had higher salaries.

Abe, I think, tried to address this issue when he was Prime Minister.

Article:

The latest survey showed that petroleum and coal product prices soared 38.8 percent from a year earlier, tracking higher crude oil prices. The pace of rise slowed from a 42.0 percent gain in June.

Prices for wood and lumber products surged 33.1 percent on supply shortages due to growing demand for house building and other uses.

Ideas:

Higher or lower prices sometimes can attributed to basic supply and demand issues.

For example such as the wood and lumber prices and there being a supply shortage, a supply shortage usually puts pressure on prices to rise, as producers now have less to offer but still want the same about of sales or profits from the shortage supply and they would with a regular supply.

So with wood and lumber there can always be both a shortage and increase in demand at the same time. If the demand becomes unusually high it can have an affect on suppliers who are unable to keep up with a sudden increase in demand. 

And for oil and petroleum the prices are very much always related to global supplies so if the OPEC nations have reduced output or supplies on the world market that can cause a surge in prices globally.

Supply chains challenges could still be a factor during the pandemic as most likely transporting by oil tankers might not be operating at full capacity which could result in some shortages.

Article

Nonferrous metal prices gained 32.3 percent while those for scrap and waste jumped 81.2 percent. Prices of textile products, which often indicate the strength of domestic demand, were up 0.5 percent.

"The global economic recovery continues in line with progress in vaccinations (against COVID-19) and wholesale prices are facing upward pressure," a BOJ official said. "But coronavirus cases have been resurging at home and abroad, and uncertainty is rather increasing."

Ideas:

As manufacturing sectors continue to improve the demand for more metals will increase which will force prices up. And or a shortage of the metals at the same time will force prices up.

While textile prices might be increasing, it does really mean consumer or even all producer/suppliers will feel the affect of the increase in prices. 

Even the textile sector is complex so even companies in the textile sector might be "passing on" the higher prices to the next customers in the supply chain.

Yes, wholesale prices might be facing some upward pressure but at the same time, the wholesalers might be reluctant to "pass on" their higher costs at the moment because the pandemic is still very much a problem in Japan.

The global economy may indeed be in a recovery phase but it has a long way to go due the the continued increase in new variants, the semiconductor shortage, and the vulnerability in global supply chains.

Have a nice day and be safe!