TOKYO, Reuters – Japan’s December wholesale inflation is likely to stay near a peak due to companies raising prices in an effort to offset rising raw materials costs. A Reuters poll on Friday showed that Japan’s retail inflation was at its highest level since 2007.

A poll of 17 economists found that the corporate goods price index, which measures the charges companies make for their products, rose 8.8% in December from a year ago.

This would be in addition to a 9.0% increase year-on-year in November. It is the fastest rate since 1981, when comparable data were made available.

According to poll results, December’s wholesale price index will increase by 0.3%, slightly slower than the 0.6% gain in November, which was the highest monthly growth since January.

Takeshi Minami of Norinchukin Research Institute, chief economist said that “Import (cost inflation) apparently stopped”, as December’s forex rate showed a stronger yen than November and that the rise in oil price halted.

“Nevertheless, however, in domestic markets, the trend towards passing higher prices to final products prices has been ongoing.”

Combining a weak currency and rising global commodity prices has slowly pushed Japan’s consumer prices up, although at a lower rate than wholesale inflation. In November, Japan’s core consumer price index (BOJ benchmark reading) rose 0.5% year on year, marking an almost 2-year high.

The December rate review did not include any changes by the central banks to their ultra-easy policies. However, a scaled-down pandemic fund programme was approved. As inflation is below 2%, this reduction will be made.

January 14th, 2008 at 08:50 a.m. (Jan. 13 2350 GMT) – The BOJ will release the CGPI statistics.

The Japanese current account posted a 5.85 trillion yen ($5.05billion) surplus last week. This is down from the 1.18 trillion-yen surplus the month before. Record imports caused by rising fuel prices have inflated the trade deficit.

The current balance will be released by the government on January 12th at 8:50 (Jan. 11 2350 GMT).

($1 = 115.8800 yen)