Japanese wholesale prices rose at a faster pace than expected in November due to higher energy costs, but a firm yen and weak domestic demand will likely curb price increases ahead, suggesting the economy will continue to struggle with deflation. Wholesale prices increased 1.7 percent in November from a year earlier, faster than a median forecast of economists for a 1.5 percent rise, Bank of Japan data showed on Monday.
Gains in wholesale prices are likely to be temporary, economists say, as uncertainty about Europe's sovereign debt crisis, a strong yen, and sputtering global and domestic demand bode ill for the world-third largest economy. November's rise followed a revised 1.6 percent increase in the year to October.
From the previous month, wholesale prices rose 0.1 percent, compared with a median forecast for a 0.2 percent fall. Overall final goods prices - the prices of finished products charged to businesses - declined 0.4 percent in November from a year earlier.