By Kantaro Komiya

TOKYO (Reuters – Japan’s inflation rose fastest in the past 20 months, as more firms started to shift rising raw material prices to consumers to offset the weak yen. A Reuters poll on Friday showed that.

These data will indicate increasing economic price pressures. The Bank of Japan (BOJ), however, announced no changes to their ultra-loose Monetary Policy except that of phasing out pandemic-funding. This was done in a Friday rate review.

According to the survey of 18 economists, Japan’s core consumer price Index likely rose 0.4% in November compared with a year ago.

This would be the largest acceleration since March 2020, and it follows a 0.1% increase in October.

Analysts believe that the weakening yen combined with rising raw material prices will force companies to increase their prices in all consumer-facing areas.

Takeshi Minami (chief economist, Norinchukin Research Institute) stated that many manufacturers were able to prevent price increases by continuing their rationalization efforts.

But, now it is becoming a popular trend to pass input costs onto output prices.

Consumer inflation remained at a low level, but Japan’s wholesale prices index rose 9.0% to November. This is the highest rate of growth since 1981 when comparable data was made available. It prompted firms to transfer costs onto their retail prices.

Haruhikokuroda, the BOJ Governor, said Wednesday that consumers inflation might approach the central bank’s 2% target due to recent raw material price pressures. But he insisted on keeping monetary policies ultra-loose to reach a sustainable recovery.

According to separate government data, housing starts rose 7.1% from one year before in November. This is the ninth consecutive month with year-on year increases, following an October 10.4% gain.

Consumer price data will be released by the government at 8:30 AM on December 24 (2330 GMT, 23 Dec. 23). At 2:00 PM (0500 GMT) Dec. 24, the government will release data on housing starts.