–Japan Producer Prices Post Rises 0.8% M/M for 2nd Straight Rise
By Max Sato
(MaceNews) – Producer prices in Japan continued climbing from year-earlier levels in February amid lingering global supply constraints and high fuel and electricity costs, with the pace of increase hitting a fresh 41-year high partly in reaction to a slight dip in early 2021, data released Thursday by the Bank of Japan showed.
Rising energy and commodities markets are pushing up the prices for daily necessities in Japan but consumer price gains have been gradual. Bank of Japan policymakers project the annual consumer inflation rate will rise to just above 1% in the next two years, only a halfway point toward the bank’s 2% target, due to slow wage recovery and falling service prices.
The key points of domestic CGPI:
* The corporate goods price index (CGPI) surged 9.3% on the year in February, coming in much higher than the median economist forecast of an 8.7% rise. It was the 12th consecutive gain after rising 8.9% (revised up from a preliminary 8.6%) in January and surpassing the recent high of a 9.2% rise in November. February’s annual rate 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 marked the 12th straight year-on-year rise February. The increase in yen terms was larger at 34.0%, compared to 25.7% in contract currencies.
* The items that posted faster year-on-year increases in February compared to January include: general purpose machinery (2.5% vs. 1.6%), production machinery (1.6% vs. 1.4%), business machinery (2.0% vs. 1.3%), electric machinery and equipment (2.2% vs. 1.5%) and Information and communications equipment (1.2% vs. 0.6%).
* By contrast, the prices for petroleum and coal products showed a slower year-on-year rise of 34.2% in February after a revised 36.0% increase in January. Those for iron and steel gained 24.5%, decelerating from a revised 25.2% the previous month, while non-ferrous metal prices rose 24.9%, also slowing further from a revised 26.6% increase in January. The prices for lumber and wood products rose 58.0% after a revised 58.7% rise.
* On the month, the domestic CGPI rose 0.8% in February after gaining 0.8% (revised up from a 0.6% rise) in January, being flat in December and rising 0.6% in November. The increase was due to higher prices for refined petroleum products (gasoline, diesel and heavy fuel oil), electric power, chemicals and non-ferrous metals, largely as seen in recent months.