Japan's corporate inflation index rose 9.5% in March from a year earlier, marking the 13th consecutive month of year-on-year growth, as the russia-Ukraine conflict pushed up prices of crude oil and other international commodities and the yen weakened, the Bank of Japan (BOJ) said Tuesday. Japan's corporate price index rose 9.7% in February from a year earlier.

Data showed Japan's corporate price index rose to 112.0 in March, up 0.8 percent from February. The most notable price increases were in electric power and gas, chemicals, and non-ferrous metals.

The data also showed that Japan's corporate price index rose 7.3 percent in the fiscal year ending March 2021 from the previous year, the biggest increase since fiscal 1981. Japan's corporate price index fell 1.4% year-on-year in fiscal 2020.

The latest corporate price data show that Japan, one of the major energy importers, has had a significant impact on its economy from wild swings in commodity prices. The depreciation of the yen also contributed to the rise in corporate prices. In the fiscal year ending in March 2021, import prices in yen terms rose 32.7 per cent year-on-year, while export prices rose 12.3 per cent.

Some analysts have pointed out that Japanese companies are generally cautious about raising prices due to factors such as weak domestic demand exacerbated by the epidemic, and the difficulty in passing on prices has put great pressure on business operations.

The Bank of Japan on Monday lowered its economic outlook for eight of the country's nine regions, citing the ongoing impact of COVID-19 on service sector demand and supply chain bottlenecks.

The boj's January report upgraded the economic outlook for nine regions, but with the spread of the Novel Coronavirus strain of omikron and the outbreak of the Russia-Ukraine conflict, companies reported that high energy prices and rising raw material costs were weighing on earnings and investment and hitting private consumption. The uncertainty facing The Japanese economy has increased.

On March 22, Japan lifted key quarantine measures in 18 prefectures including Tokyo. However, the virus has recently rebounded in Japan, with the number of new infections increasing in most regions. Companies reported that forecasts for personal consumption had been revised down in all nine regions of the country due to a weak recovery in spending.

According to Kyodo News, Bank of Japan Governor Haruhiko Kuroda said on November 11 that the Japanese economy is showing weakness under the impact of the epidemic, but still continues to recover. He also said there was "great uncertainty" about the impact of the conflict on commodity prices and the Japanese economy.

Mr Kuroda predicted that high energy and raw material prices would continue to accelerate inflation in Japan in coming months, with core consumer prices, which strip out volatile fresh food prices, likely to rise significantly.

Despite the adverse impact of higher commodity prices, Mr. Kuroda said Japan's economy is expected to recover as downward pressure on service sector demand and supply shortages ease, overseas demand picks up and loose monetary policy and government stimulus continues to support it.

The yen has been weakening recently, hitting a six-year low in March, due to factors such as the divergence between the Bank of Japan's monetary policy and major global central banks such as the Federal Reserve. The Bank of Japan has diverged from the Federal Reserve in monetary policy. While the Fed is expected to raise rates more quickly, the Boj is expected to keep monetary policy ultra-loose for some time to come.

Mr Kuroda said the yen's "modest" depreciation against the dollar was due to continued strong dollar demand from Japanese importers and the fact that the Us Federal Reserve had clarified its stance on raising interest rates. The yen exchange rate should remain stable and reflect the fundamentals of the Japanese economy. A weaker yen is good for Japan's economy. Mr Kuroda believes the rise in commodity prices is not expected to last long and is unlikely to lead the boj to change its loose monetary policy stance.