TOKYO, (AFP) - Japanese wholesale prices in September rose 1.8 percent from a year earlier, chalking up the sharpest increase in more than 13 years on the back of record oil prices, the Bank of Japan said.
The last such rise in the indicator -- one of the key gauges to assess price movement in the economy -- was seen in February 1991 soon after the first Gulf War, the central bank said.
September was also the seventh consecutive month of higher figures.
The corporate price index, which measures wholesale prices, was up 0.1 percent from August.
The rise was mainly due to a steady increase in prices of raw materials, led by steel, as well as a recent sharp gain in oil prices, analysts said, forecasting the upward trend is likely to continue for the time being.
Petroleum and coal products jumped 16.9 percent from a year earlier and rose 3.7 percent on a month-on-month basis in September, the central bank said.
Steel prices climbed 16 percent, reflecting strong demand in China, with nonferrous metals prices up 14 percent.
The data, however, had little impact on financial markets as analysts said the price gains cannot directly help Japan recover from deflationary pressure.
"Prices of raw materials are gaining steadily but those of final goods remain stagnant due to sluggish consumer demand," said Tatsuya Torigoe, an analyst at Daiwa Research Institute.
"Theoretically, gains in wholesale prices can lead to inflation, which Japan has long sought, but the Japanese economy is not yet ready to accept higher prices at the retail level," Torigoe said.
"The price gap (between wholesale and retail) is currently been made up by companies," he said. "Thanks to a moderate recovery in the corporate sector, many firms can bear the price pressure by squeezing profits -- but there must be a limit in the end."
The central bank said prices of raw materials jumped 16.6 percent from a year earlier in September but those of final goods fell 1.0 percent, with prices of durable goods down 2.8 percent.
Analysts said the September figure was unlikely to prompt the central bank to reverse its near-zero interest rate policy designed to pick up the economy.
Japan's central bank on Wednesday left its stimulative monetary policy unchanged, saying it would not tighten credit until core consumer prices rose or stayed consistently flat compared with a year earlier.
In August, core consumer prices fell 0.2 percent from a year earlier.
The Cabinet Office separately said Japan's consumer confidence index slipped to 46.2 in September from 49.1 in August, with respondents more pessimistic in all aspects surveyed.
The latest survey found Japanese are less satisfied with their general economic well-being, less confident in their outlook for income growth and employment conditions, and less willing to buy durable goods.
Numbers below 50 on the index mean pessimists outnumber optimists.