–Japan Producer Prices Rebound M/M After Being Flat in December
By Max Sato
(MaceNews) – Producer prices in Japan continued rising from year-earlier levels in January amid lingering supply bottlenecks but the pace of increase decelerated further after hitting an over four-decade high in November in light of what appears to be a temporary easing in energy and commodities markets, data released Thursday by the Bank of Japan showed.
Higher import costs for food and energy are pushing up consumer prices at a snail’s pace in Japan, compared to spikes seen in other major economies. Bank of Japan policymakers project the annual consumer inflation rate will rise to just above 1% in the next two years, only halfway to the bank’s 2% target.
The key points of domestic CGPI:
* The corporate goods price index (CGPI) rose 8.6% on the year in January, marking the 11th consecutive gain after rising 8.7% (revised up from a preliminary 8.5% rise) in December and 9.2% in November, a four-decade high. It was higher than the median economist forecast of an 8.2% rise. November’s 9.2% increase is the largest 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 kept producer import costs high, which continued posting double-digit percentage gains on the year for 10 months in a row in January, in both yen (+37.5%) and contract currencies (+28.0%).
* The prices for petroleum and coal products showed a slower year-on-year rise to 34.3% in January from 36.6% in December. Those for iron and steel gained 25.1%, compared to 25.8% the previous month, while non-ferrous metal prices rose 26.5%, slowing from a 27.2% increase in December. Prices for lumber and wood products surged 58.5% after soaring 60.6%.
* On the month, the domestic CGPI rose 0.6% in January after being flat (revised up from a 0.2% drop) in December and rising 0.6% (revised down from 0.7%) in November. The increase was due to higher prices for refined petroleum products (gasoline, kerosene and heavy fuel oil), electric power and non-ferrous metals, largely as seen in recent months. Prices for farm products and scarp and waste slipped back.