Looking at developments in the DI for firms' output prices in the Bank's latest March 2022 Tankan to examine their price-setting stance, the DI has reached the highest level since 1980 (i.e., just after the second oil shock) for the manufacturing industry and the highest level since 1991 (i.e., the end of the bubble period) for the nonmanufacturing industry (Chart 10).
These moves to raise selling prices are mainly due to cost-push factors stemming from the surge in raw material prices. However, such a pass-through of cost increases was barely seen when a similar price hike in raw materials occurred in past deflationary periods, like the one from 2007 to 2008.