–December’s Revised 10.6% Y/Y Rise Remains Highest in 42 Years
By Max Sato
(MaceNews) – Producer inflation in Japan eased for the third straight month in March as the government’s expanded utilities subsidies continued to cap energy costs and slowing global demand has cooled off commodities markets, data released Wednesday by the Bank of Japan showed.
The key points of CGPI:
- The corporate goods price index (CGPI) rose 7.2% on the year in March in line with the median economist forecast of a 7.2% rise (forecasts ranged from 6.9% to 7.4% gains). It was the 25th consecutive gain following increases of 8.3% (revised from 8.2%) in February and 9.5% in January. December’s 10.6% rise (revised from 10.5%) 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.
- In fiscal 2022 that ended last month, the CGPI rose 9.3% on the year, accelerating from a 7.1% rise in fiscal 2021.
- The relatively weak yen at around Y134 to the dollar in March, compared to Y118 a year earlier, is keeping import costs high, although they are well below the peak seen last year. The year-over-year increase in the CGPI’s import price index in yen terms was 9.9% in March (15.1% in February), higher than 0.4% (3.6% previously) in contract currencies. The pace in yen-based price increase continued to slow from a 49.2% surge in July 2022. The dollar appreciated 0.9% against the yen on the month in March after rising 1.8% in February and depreciating 3.5% in January, BOJ data showed. The dollar briefly surged to a 32-year high of Y151.94 in October 2022 but Japan’s second wave of massive yen-buying forex intervention pushed it down to a low of Y143.55 in the same month.
- The producer costs for electric power, gas and water — the category that is also driving consumer prices higher – rose 26.8% on the year in March but the pace of increase continued decelerating from 33.6% in February.
- Iron and steel maintained a double-digit percentage gain but posted a slower increase of 17.4% after rising 18.3% the previous month. Those for chemicals continued slowing to a 3.4% rise from a 4.7% increase. The prices for non-ferrous metals rose just 1.9% in March, also decelerating from a 5.3% gain in February.
- The prices for petroleum and coal products fell 3.2% on the year in March after dipping 4.7% in February and turning negative in January. The prices for lumber and wood products slumped 14.8% from a year earlier for the fifth straight drop after falling 11.5%.
- Ceramic, stone and clay products have seen upward pressures on their prices until recently but they eased slightly in March to a 12.3% rise on the year from
a 12.7% gain the previous month. Metal product prices were up 12.5%, off slightly from 13.0%. - The prices for the beverages and foods — a category with a high weighting of 144.6 out of 10,000 for the domestic CGPI — rose 7.0% on the year in March after rising 8.0% in February. Those for transport equipment (150.9 weight) rose 4.2%, down slightly from a 4.7% gain the previous month.
- On the month, the domestic CGPI was unchanged in March after falling 0.3% in February, dipping 0.1% in January and slowing from the recent peak of a 1.6% rise hit in April 2022. It was just below the median economist forecast of a 0.1% rise (forecasts ranged from a 0.2% fall to a 0.3% gain). Higher costs for fuels (gasoline, diesel and jet fuel), farm produce (beef, eggs, rice) and textile products (shirts, towels) were offset by lower prices for utilities (electricity and gas) as well as lumber and wood products.
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Contact this reporter: max@macenews.com