Bank of Japan sees broadening inflationary pressure

TOKYO, Oct 8 : The Bank of Japan said on Thursday price increases driven by higher raw material costs were spreading to consumer goods with some firms hiking prices more frequently than in the past, signaling its concern over broadening inflationary pressure.

The central bank also offered an upbeat view on the economic outlook, saying brisk AI-related demand was increasing domestic output for electronic goods, machinery and telecommunication infrastructure.

"Many regions saw firms passing on a broad range of rising costs," including higher raw material costs from the Middle East conflict and the weak yen, as well as increasing labour costs, the BOJ said in a statement released after a quarterly meeting of its regional branch managers.

The BOJ raised its economic assessment for two of the country's nine regions and maintained its view for the remaining areas, saying they were all recovering moderately.

Given volatile moves in input costs, some firms are raising prices more frequently than in the past, the statement said.

"Efforts to pass-through rising costs are spreading to firms close to consumers," leading to more companies raising prices, the statement said.