Japan’s producer prices fell for a second consecutive month in September, while annual inflation eased to 6.8%; yen-based import prices, meanwhile, remained sharply higher than a year earlier.
Preliminary data released Oct. 13 by the Bank of Japan (BOJ) put its producer price index at 135.7 on a 2020=100 scale. The index fell 0.3% from August and increased 6.8% from a year earlier, down from August’s 7.6% annual pace. The BOJ marked September’s figures as preliminary. The 2020=100 base means the index remained above its base-year level despite the monthly decline.
The corporate goods price index (CGPI) tracks prices for goods traded in Japan’s corporate sector. Its producer-price measure covers domestically produced goods traded within Japan, with prices generally surveyed at the producer shipment stage.
Agriculture, forestry and fishery product prices fell 8.8% from August, subtracting 0.42 percentage point from the overall monthly change. Brown rice, polished rice and pork were among the commodities the BOJ listed as contributors. Petroleum and coal product prices fell 2.2%, trimming the change by 0.15 percentage point. Heavy oil B and C, gas oil and jet fuel oil also appeared in the BOJ’s list. Despite the monthly drop, petroleum and coal prices were 11.5% higher than a year earlier.
Trade prices moved differently depending on the currency measure. In contract currencies, export prices rose 1.4% from August and 12.4% year over year; import prices increased 1% monthly and 17.9% annually. Measured in yen, import prices slipped 0.2% on the month but remained 24.5% above their year-earlier level. The BOJ’s dollar-yen exchange-rate series fell 1.5% in September. The central bank says that reading indicates the yen strengthened against the dollar.
Reuters reported that September’s 6.8% annual increase was below the median market forecast of 7.6%. The outlet also reported that Masato Koike, a senior economist at Sompo Institute Plus, viewed uncertainty over the Middle East conflict and elevated crude prices as risks that could lift wholesale inflation again.
The BOJ scheduled its next monthly CGPI report for Nov. 12.
