The Bank of Japan is increasingly cautious about inflationary pressure stemming from rising crude oil prices amid Middle East tensions.
BOJ data showed Friday that the producer price index, which measures the costs of goods traded between companies, rose 2.6% year on year to 129.5 in March, against the 2020 average of 100.
A rise in producer prices would lead to increases in companies’ procurement costs, and eventually to growth in consumer prices. The BOJ is expected to face difficulties steering its monetary policy, as raising interest rates to contain inflation could cool the economy.