The latest survey of firms done for Reuters will provide some fodder to those looking for higher Japanese inflation and thus some form of tightening from the Bank of Japan.
So far calls for the BOJ to dial back its easy monetary policy have been premature. The Bank of Japan have repeated time and again it sees inflation as transitory and that it intends to hold easy policy steady (and ease further if needed!). When the change does come it'll be a tectonic shift. Can't blame traders for trying to pre-empt it I(although the 'trend is your friend' would disagree).
Reuters Corporate Survey, highlights fo the results:
- Four out of five large Japanese firms are passing on higher commodity costs to customers or intend to do so, a sharp rise from the previous survey six months ago
- Citing surging input prices and a weak yen driving up import costs
- Almost three quarters of firms polled also intend to lift prices of their main goods and services in the latter half of this year
- 21% of big Japanese firms are passing costs to clients while 57% plan to transfer costs eventually, about one in five have not been able to do so. That marked a sharp increase from the previous survey taken at the start of this year, in which 43% of big firms planned to transfer costs and 36% were not able to do so.
- The poll highlighted the corporate response to cost-push, rather than demand-pull, inflation that has accelerated since Russia invaded Ukraine in February, prompting firms to lift prices of items as varied as food, fuel and cosmetics.
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The survey is a monthly poll.
- Its carried out by Nikkei Research on behalf of Reuters.
- Canvassed about 500 large non-financial Japanese firms (around half responded)
- Conducted from June 29 through July 8
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Yen has been very weak indeed, and still is. Driven by numerous factors including:
- policy divergence between the BOJ and ... just about everyone else
- high energy prices
