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By Leika Kihara<\/p>\n
TOKYO, May 15 (Reuters) – Japan may face another round of broad-based price increases around summer, as firms ranging from \u200cfood makers to hot spring facilities consider passing on soaring \u200cenergy costs from the Middle East conflict, the central bank said on Friday.<\/p>\n
Shedding their long-held \u200bpractice of keeping prices low, many service-sector firms are steadily passing on rising raw material and labour costs, the Bank of Japan said in a report based on a survey of regional firms conducted from January to April.<\/p>\n
Rising \u200cenergy costs from the \u2060Middle East conflict are also prodding firms to accelerate price increases under business plans for the fiscal year that \u2060began in April, the report said.<\/p>\n
Some have already decided to raise prices at a faster pace including those in the food industry, restaurants and hot \u200bspring facilities, \u200bit said.<\/p>\n
“Others said they will decide \u200bwhether to do so soon. \u200cAs for the specific timing, some said they would decide around summer or beyond,” the report said.<\/p>\n
The report underscores the BOJ’s growing attention to inflationary pressures building in the economy that could add to the case for a near-term interest rate hike.<\/p>\n
Highlighting the cost pressure companies face, annual wholesale \u200cinflation hit a three-year high of 4.9% \u200bin April as the Iran war boosted \u200bpetroleum and chemical goods prices.<\/p>\n
Compared \u200bto when the Ukraine war pushed up raw material \u200cprices in 2022, Japanese service-sector firms \u200bare spending less \u200btime before deciding to raise prices, the report said.<\/p>\n
“Previously, companies had to spend significant time for internal discussions and negotiations with their \u200bclients. Some firms say \u200cthat this time, the process was relatively quicker as they had \u200bcontinued to raise prices for some time,” it said.<\/p>\n
(Reporting by \u200bLeika Kihara; Editing by Sam Holmes)<\/p>\n<\/p><\/div>\n