InsideJapan News Network

Wholesale prices in Japan rose in June, figures have shown, the second month in a row that such numbers have gone up but a gain still smaller than some analysts hoped for.

In May, a predicted rise of 0.4 per cent was revised to suggest a rise of 0.5 per cent, but there had been hopes of an increase more like 0.6 per cent.

Numbers from the Tankan survey showed that demand for Japanese products in economies such as China is helping to push up the prices of wholesale goods in Japan. Business Week noted that many Japanese firms are "struggling to pass the increases on to customers who are used to obtaining cheaper goods".

Commenting before the figures were released, a senior economist at the Daiwa Institute of Research in Tokyo Hiroshi Watanabe told the source: "The problem of input-price inflation and output-price deflation will persist. Narrowing margins are a blow to companies because cost-cutting is a major boost for their earnings now."

Japan's economy is still emerging from its deepest recession since the end of the second world war and is also struggling with deflation.

Written by Kimberley Homer.