Motivated by a rise in the cost of goods that may help to arrest depreciation, the producer prices of Japan have increased for second month in June.

Demand from rising economies, including China is increasing material prices for Japanese corporations, which are struggling to pass on their burden to the customers who are not used to purchasing expensive goods.

The central bank’s tankan survey has revealed that this month most of the companies are expecting that there will be a rise in the wholesale prices over the next quarter though their sale prices continue to slide down.

“The problem of input-price inflation and output-price deflation will persist, narrowing margins are a blow to companies because cost-cutting is a major boost for their earnings now”, said Hiroshi Watanabe, a senior economist at the Daiwa Institute of Research in Tokyo.

Before the figures were mentioned, the yen sold at 88.78 per dollar in Tokyo from 88.80.

Last week, Governor of Central Bank Masaaki Shirakawa said that the second largest economy of World will keep on expanding the rise in overseas demand, while the speed of production and exports will steadily slow.

He further added to his statement that to overcome the decrease in prices, the bank will keep a very accommodative strategy.