Impact of US tariffs on Japan's inflation was limited due to cooling trade tensions

According to Reuters, Japan's wholesale inflation reached 4% in April. Manufacturers compensated rising costs for raw materials and workforce at the expense of buyers. These dynamics may force the country's central bank to continue rate hikes, the news agency reports.

Japanese officials stated that Donald Trump's sweeping US import tariffs, announced in early April, have not caused much damage to the country's economy. This is largely due to a drop in global trade tensions after successful negotiations between the United States and China, Reuters notes.

The recent strengthening of the yen against the dollar has reduced the cost of imports. Moreover, the annual increase in the corporate goods price index in April was below the revised March readings.

By contrast, the cost of some goods in Japan accelerated its growth. Thus, food and beverage prices rose by 3.6% in April after a 3.4% rise in March, and agricultural goods were up 42.2% after 39.1% a month earlier, Reuters adds.

The impact of the US tariffs on the Japanese economy has been limited, but it remains in place, as do a number of duties imposed by Trump before April.