–Japan April Producer Prices Also Jump 1.2% on Month on Naphtha, Fuel Oil
–BOJ Sees Core CPI Temporarily Up at 2% in Fiscal 2022 But Not Anchored
By Max Sato
(MaceNews) – Producer inflation in Japan surged to a fresh 41-year high, hitting
10% in April as the year-on-year increase in crude oil, steel products and non-
ferrous metals accelerated from March amid lingering supply bottlenecks and
reopening demand, data released Monday by the Bank of Japan showed.
By contrast, consumer inflation remains tame in Japan as wage growth has been
slow and some firms are cautious about passing higher costs on to customers for
fear of losing market share or dampening consumer spending. The core CPI
(excluding fresh food) for April, due Friday, is forecast to show a 2.1 percent rise
on year, up sharply from a 0.8 percent gain in March, but that’s largely because
the base effects of sharp mobile phone charge discounts introduced in April 2021
have waned.
The Bank of Japan board projects inflation will average just under 2% temporarily
in the current fiscal year ending in March 2023 before slipping back to around 1%
in the next fiscal year as the impact of surging commodities prices fades out.
The key points of domestic CGPI:
- The corporate goods price index (CGPI) soared 10.0% on the year in April,
coming in well above the median economist forecast of a 9.4% rise. It was the
14th consecutive gain after rising 9.7% (revised up from a preliminary 9.5%) in
March and climbing 9.8% (revised up from 9.7%) in February. It was the highest
since December 1980, when the index jumped 10.4% for the 14th straight month
of double-digit percentage gains in the wake of the 1979 oil crisis triggered by the
Iranian Revolution. - The depreciation of the yen has also added fuel to high import costs at producer
levels, which also marked the 14th straight year-on-year rise in April. The increase
in yen terms was larger at 44.6%, compared to 29.7% in contract currencies. - The prices for petroleum and coal products rose 30.9% on year in April,
accelerating from a 27.0% rise in March. The prices for iron and steel rose 29.9%,
up from a 28.3% rise the previous month while those for non-ferrous metals
gained 25.0%, also up from a 23.5% increase in March. The prices for lumber and
wood products remained elevated but continued easing slightly to a 56.4%
increase in April from a 58.9% rise in March. - On the month, the domestic CGPI rose 1.2% in April after gaining 0.9% (revised
up from a 0.8% rise) in March and 1.0% (revised from 0.9%) in February. It was
firmer than the median economist forecast of a 0.8% rise. The increase was due
to higher prices for naphtha (the key material for producing plastics and resin
which are used in various goods including automobiles and electronic appliances),
fuel oil, copper, aluminum alloys and electric power. - —
- Contact this reporter: max@macenews.com
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