Japan's producer prices edged higher in March, as domestic enterprises faced rising fuel bills.
Japan's producer price index (PPI) rose 2.6% on year in March, after rising 2.1% on year in February, reported the Bank of Japan on Friday.
The PPI rose 0.8% in March from February, as the petroleum and coal sub-index PPI rose 7.7% on month, reflecting the jump in global fuel prices after the closure of the Strait of Hormuz in early March.
About 20% of global oil production flows through the Strait of Hormuz, which has been effectively closed by Iran.
Japan's PPI measures selling prices received by domestic producers for goods at the factory gate, in business transactions with large buyers. It is distinct from the consumer price index (CPI), which measures prices in retail locations.
Other PPI sub-indices were generally muted in March, although the textile products rose 3% from February, reported the Bank of Japan.
Japan's PPI had accelerated during the pandemic era, striking a crest of a 10.6% on-year gain in December 2022.
More recently, the nation's PPI rose more than 4% on year in early 2025, but since then has been gradually easing, until the March report.
The PPI is considered one of the leading indicators of a nation's consumer prices, as retailers try to recoup the costs of acquiring goods to stock shelves.
The Bank of Japan has a 2% annual inflation target on Japan's CPI-core, which strips out fresh food prices. That metric logged a 1.6% on-year gain in February, down from a 2% rise in November 2025, reported officials.
The next Bank of Japan policy meeting is slated for late April. Central bankers will face oil-price-induced inflation, but also an economy that is growing sluggishly, and may be hamstrung by higher fuel bills.