–November’s 0.3% Y/Y Rise Remains Lowest Since 0.9% Drop in February 2021
–Producer Prices Up 0.2% M/M for 1st Rise in 3 Months on Rebound in Fuels, Non-Ferrous Metals
By Max Sato
(MaceNews) – Producer inflation in Japan eased for the 11th straight month in November, slowing to a 0.3% rise on the year from a revised 0.9% gain in October, as the government reinforced subsidies to cap utility costs and weaker global demand has calmed commodities markets, data released Tuesday by the Bank of Japan showed.
Corporate goods prices rose 0.2% on the month for the first rise in three months, as expected, in light of a rebound in fuel costs and non-ferrous metal prices, which more than offset drops in electricity, chemical products and farm produce.
The data also showed business import prices posted their eighth straight year-over-year decline, which has helped ease the upward pressure on consumer prices, but the pace of decline was the slowest in six months.
The key points of CGPI:
* The 10.6% jump in December 2022 remains the highest in 42 years, since November 1980, when the index rose 11.8 percent during the 14-month period of double-digit percentage gains through December 1980 in the wake of the 1979 oil crisis triggered by the Iranian Revolution.
* On the month, the domestic CGPI rose 0.2% in November after falling 0.3% (revised from a 0.4% dip) in October. Previously, the index fell 0.2% in September and rose 0.3% in August. It has eased from the recent peak of a 1.6% rise hit in April 2022. The latest figure was in line with the median economist forecast of a 0.2% rise (forecasts ranged from a 0.2% drop to a 0.4% gain). The increase was led by a rebound in fuels (gasoline, heavy fuels and jet fuel) and non-ferrous metals (copper, aluminum alloy), offsetting lower prices for electricity, chemicals (chemical fertilizer, xylene and benzene) and farm produce (chicken eggs, pork and dried fish).
* The yen stayed weak at an average ¥149.83 to the dollar in November during Tokyo trading hours, little changed from ¥149.53 in October but softer than ¥147.67 in September. It was much weaker than ¥130.20 in January. The appreciation of the yen seen earlier this year had helped lower import costs from elevated levels. The dollar briefly surged to a 32-year high of ¥151.94 in October 2022 but Japan’s second wave of massive yen-buying forex intervention pushed it down to a low of ¥143.55 in the same month.
* The producer costs for electric power, gas and water slumped 24.5% on the year in November for the fifth straight drop after falling 19.7% in October and posting double-digit percentage gains earlier. The government has extended its utilities subsidies until yearend. The program aimed at easing the pain of both households and businesses was launched in January and it was originally scheduled to be phased out at the end of September.
* The prices for lumber and wood products fell 16.7% from a year earlier for the 12th straight drop after falling 18.2% the previous month. Iron and steel prices fell 4.1% after falling 4.0% the previous month. Those for chemicals dipped 1.9% following a 1.8% drop.
* The prices for foods and beverages — a category with a high weighting of 144.6 out of 10,000 for the domestic CGPI — rose 4.0% on the year in November after rising 5.0% in October. Those for transport equipment (150.9 weight) rose 2.2% after a 2.8% gain the previous month.
* The prices for non-ferrous metals rose 4.6% in for the fifth straight increase after rising 3.6%. Those for petroleum and coal products also posted the fifth increase in a row, up 3.5% on the year in November, following a 0.5% rise in October.
* The prices for ceramic, stone and clay products eased further to a 12.3% rise on the year in November from a 13.2% gain the previous month. Metal product prices were up 5.4%, also slowing from a 6.0% increase.