Japan Nov Producer Price Rise Remains 4-Decade High on Energy, Commodities

By Max Sato

(MaceNews) – Producer prices in Japan continued rising from year-earlier levels, staying at a four-decade high, as global supply chain disruptions, albeit easing slightly, as well as labor shortages are pushing up energy and commodities markets, data released Friday by the Bank of Japan showed.

By contrast, consumer inflation in Japan remains subdued amid weak wage growth, picking up slowly just above zero. The dampening base effect of deeper mobile phone user fee discounts partly is offsetting rising prices for utilities, fuels and processed food. Policymakers consider consumer prices “firm” if temporary factors are excluded. 

The key points of domestic CGPI:

* The corporate goods price index (CGPI) continued to surge a preliminary 9.0% on the year in November, the ninth consecutive gain after rising 8.3% (revised up from an initial 8.0%) in October. It was above the median economist forecast of an 8.5% rise and the largest increase 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 boosted producer import costs, which continued posting double-digit percentage gains on the year for eight months in a row in November, in both yen and contract currencies.

* The prices for petroleum and coal products stayed sharply above year-earlier levels, up 49.3% in November, with the pace of increase accelerating from a revised 44.4% in October. Those for iron and steel gained 23.9% after rising a revised 22.5% the previous month while precious metal prices rose 32.8% after a 31.4% rise. The prices for lumber and wood products soared 58.9%, slowing slightly from an upwardly revised 59.6% in October but keeping homebuilding costs high. 

* On the month, the domestic CGPI rose 0.6% in November after rising 1.4% (revised up from 1.2%) in October. The increase was led by refined petroleum products (gasoline and diesel), utilities (electricity for industrial and commercial use) and iron and steel.

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Contact this reporter: max@macenews.com.

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