Japan Wholesale Prices: Ideas Later. To be continued.

Japan Aug. wholesale prices up 7.6%, remain above 7% for 3rd month in row

Article to be deleted after ideas.

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TOKYO (Kyodo) -- Japan's wholesale prices in August rose 7.6 percent from a year earlier, remaining above 7 percent for the third consecutive month, due to higher oil prices amid prolonged tensions in the Middle East and rising prices of artificial intelligence-related materials driven by growing demand, Bank of Japan data showed Friday.

The growth in prices of goods traded between companies decelerated from 7.7 percent in July, which was revised upward from 7.2 percent.

Ideas

Wholesales prices, for the most part, globally, are up everywhere due to the mentioned ideas and they probably are not going to decrease anytime soon as maybe there is wholesale price bubble that is very hard to decrease and it might take month or even years if even then.

Unfortunately, most wholesale prices are going to be pasted-on the next in the supply chain including the final retail customer, and customers are already, globally, are stressed out from high prices and again its not going to get any better in the future, or so it seems.

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The data came as the BOJ is assessing the right timing to further raise its key interest rate to sustainably achieve its 2 percent inflation target.

The price of nonferrous metals surged 43.3 percent from a year earlier, accelerating from a revised 40.7 percent increase in July. Copper prices rose amid growing demand for AI-related data centers, while aluminum prices climbed amid the Iran war.

Ideas

The BOJ is very conservative and its not going to do anything that is going to hurt Japanese society or the economy and they might increase the key rate but it won't be a major increase but just a minimal increase to see how that is going to affect the economy.

Yes, many of these materials needed for AI products are going up even more and as usual whenever a commodity or product have some kind of increase in demand companies will begin to increase the price and most likely the price is not going to increase anytime soon.

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Information and communications equipment rose 19.5 percent due to higher memory chip prices, and petroleum and coal products saw a 14.7 percent increase.

Beverages and foods climbed 4.3 percent as higher crude oil and naphtha prices pushed up costs for plastic packaging materials used for frozen cooked foods and pastries.

Ideas

Once again, prices are going up everywhere globally, and they are not going to decrease anytime soon which means consumers globally are going to see their disposable incomes decease even more.

And yes, the Middle East situation is not good and is making it worse and even without the Middle East situation global prices have been going up and will continue to go up due to the demand for AI related materials and products.

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"Higher crude oil prices are being passed on to downstream products, including food and beverages as well as plastic products, (which reach customers)," a BOJ official said.

Import prices jumped 24.8 percent in August from a year before, while export prices gained 17.9 percent.

Ideas

It should be understood there is an increase in volume and and increase in value of prices and the weak Japanese yen is causing havoc on import prices in Japan and as usual importers are passing-on prices to the next in the supply chain including the final retail customer.

Global oil prices are very volatile because energy and oil companies are always quick to increase prices even if there is not drama as they are quick to make sure their profit margins are always safe and in a zone that is preferable to their shareholders.

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Sources familiar with the matter said earlier that the central bank plans to raise its policy rate to 1.25 percent at its two-day policy meeting starting next Thursday, after raising it to a 31-year high of 1.0 percent in June and leaving it unchanged in July.

Ideas

An increase of 1.25 by the BOJ is not a major increases as a 0.25 increase is a minimal increase and that is all the BOJ is going to do, even it they do that as a way to protect the economy while at the same time to help manage the economy and inflation in Japan.

The BOJ, maybe, has finally aligned itself with other central banks, as for a long time, the BOJ was not aligned as it was doing what it thought was in the best interest of Japan, despite what was happening in the global economy.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260911/p2g/00m/0bu/024000c