Last December, after two years of stop-and-go growth, Japan’s economic engine seemed like it might finally be revving up. Covid cases were practically nonexistent. Consumers were back on the town, shopping, eating out, traveling. The year 2021 ended on a high note, with the country’s economy expanding on an annual basis for the first time in three years. But the Omicron variant of the coronavirus, geopolitical turmoil and supply chain snarls have once again set back Japan’s fragile economic recovery.

Japan's wholesale prices in April jumped 10% from the same month a year earlier, data showed on Monday, rising at a record rate as the Ukraine crisis and a weak yen pushed up the cost of energy and raw materials, Reuters reported. The surge in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, marked the fastest year-on-year rise in a single month since comparable data became available in 1981. The gain followed a revised 9.7% increase in March, and was higher than a median market forecast for a 9.4% increase.

Japanese audio equipment maker Onkyo Home Entertainment Corp. has filed for bankruptcy, with some 3.1 billion yen (about $24 million) in total liabilities, the company announced on May 13, the Mainichi Japan reported. The firm, based in the Osaka Prefecture city of Higashiosaka, filed for the commencement of bankruptcy proceedings with the Osaka District Court and its petition was accepted, the company said. Besides its Onkyo brand, the firm also has the "Pioneer" brand under its umbrella. Due to a decline in earnings, Onkyo had been struggling with cash management.

For years, as Japan tried to boost its chronically weak economic growth, it pursued what its central bank saw as a magic formula: stronger inflation and a weaker yen, the New York Times reported. It didn’t quite work as intended. Inflation never met the government’s modest target, despite rock-bottom interest rates and heaps of fiscal stimulus. Workers’ wages stagnated, and growth remained anemic. Now, Japan is suddenly getting what it wished for — just not in the way it had hoped.

Japan's manufacturing activity grew at a slower pace from the previous month in April as supply chain disruptions and strict Chinese coronavirus lockdown measures hurt overseas demand, Reuters reported. Activity in the sector was held up by resilience in output, overall orders and optimism about the year ahead, even as producers grew more wary of persisting price pressures, the Ukraine war, logistics logjams and the global economic outlook.

In Japan, where prices have been roughly flat for decades, inflation is finally taking off. But unlike the Federal Reserve in the U.S., the Bank of Japan has resolved to keep interest rates low, helping drive a fall in the yen, the Wall Street Journal reported. On Thursday, the Japanese central bank resumed another bond-buying move aimed at keeping a lid on rates. It promised to purchase unlimited quantities of government bonds to cap the yield at 0.25%—less than one-tenth the return on the equivalent U.S. Treasury bonds.

Japanese Finance Minister Shunichi Suzuki said on Tuesday the damage to the economy from a weakening yen at present is greater than the benefits accruing to it, making the most explicit warning yet against the currency's recent slump versus the dollar, Reuters reported. The yen's fall has worsened imported inflationary pressures in Japan amid a spike in global commodity and oil costs, and an increase in supply snags, which have intensified in the wake of the Ukraine crisis.

Japan is in the midst of en masse hiring season, when a wave of college graduates join companies in formal ceremonies after sweating through the job-interview gantlet. While this year’s ritual has a different look, with Covid-19 forcing many companies to scale back or go online, the goal has long been the same: to kick off what was often a lifetime devoted to one company, the New York Times reported.

Japanese Prime Minister Fumio Kishida said the central bank's monetary policy is aimed at achieving its 2% inflation target, not at manipulating currency rates, brushing aside the view the country must end an ultra-low interest rate policy to stem sharp yen declines, Reuters reported. Kishida also said the recent rise in domestic inflation was due mostly to a global spike in crude oil and raw material costs, rather than the weak yen.

The Bank of Japan (BOJ) is likely to raise its inflation forecast for this fiscal year to near 2% at this month's policy meeting as global commodity inflation drives up energy and food costs, Reuters reported. While the upgrade will bring inflation closer to its 2% target, the central bank will stress its resolve to keep monetary policy ultra-loose to underpin a fragile economic recovery.