By Leika Kihara

TOKYO (Reuters). Japan’s wholesale prices increased 8.5% by December compared with a year before, according to data released on Friday. The increase was for a tenth month, a signal that higher fuel and raw materials costs continue to affect corporate margins.

From a November 9.2% rise, the increase in the corporate good price index (CGPI), which tracks the charges companies make each other for goods and services, has slowed. The median forecast market for an 8.8% rise was it.

In the wake of the coronavirus pandemic, persistent cost pressures combined with an inflating Japanese yen have caused severe economic problems for Japan’s third largest economy.

Japan is not immune from the effects of rising commodity inflation. However, companies have been careful about passing higher prices to consumers to avoid cost-sensitive households reducing their spending.

The core consumer price index rose 0.5% in November compared to a year ago, which is far less than the rise in wholesale inflation but still well under the central bank’s target of 2%.