TOKYO (AP) -- Japan's corporate goods prices rose at their fastest pace in 27 years on the back of expensive energy and raw material prices, the Bank of Japan said Friday.
Rising wholesale costs may mean that the consumer price index will climb even further, as domestic companies push up consumer prices to reflect their increasing business costs.
Japan's index for domestic corporate goods prices rose 3.9 percent in March from a year earlier to 106.7, growing at the fastest pace since a 5.7 percent gain in February 1981 -- when the nation's goods prices were also rising due to high oil prices.
The rise last month was larger than February's 3.6 percent rise and also faster than the 3.5 percent growth that Tokyo-based analysts surveyed by Dow Jones had forecast on average.
The strength in corporate goods prices is partly due to ''the shift of money into commodities from financial assets in the overseas market,'' the central bank said.
In categories that contributed to the index's rise, petroleum and coal products costs rose 1.3 percent on month in March, compared with a 0.5 percent fall in February. Iron and steel prices climbed 2.7 percent on month in March compared to February's 1.7 percent gain.
The rise in consumer goods costs ''should reflect the reality that firms are now raising product prices due to increased production costs, suggesting likely repercussion effects into consumer prices,'' said Susumu Kato, chief economist at Calyon Securities.
The central bank uses 2005 as the base year for its corporate goods pricing index.