Japan's producer price inflation outpaces forecasts in March
(MENAFN) Japan's Corporate Goods Price Index (CGPI), a measure of producer prices, saw a 4.2 percent increase year-over-year in March, according to initial data released by the Bank of Japan (BOJ) on Thursday. This figure surpassed the median market forecast, which had predicted a 3.9-percent rise.
The index, based on 2020 levels, reached 126, primarily fueled by a continued surge in the prices of agricultural products, notably rice. The CGPI is a key indicator as it reflects the price trends of goods traded between companies and subsequently influences both the Corporate Services Price Index and the Consumer Price Index (CPI).
The data revealed that rice prices have remained elevated, while a reduction in egg supply due to avian influenza has led to a sharp increase in egg prices. Additionally, the prices of petroleum and coal products experienced an 8.6 percent rise, partly attributed to the government's reduction of gasoline subsidies. Food and beverage prices also saw a 3.1 percent increase, reflecting manufacturers' efforts to pass on the higher costs of raw materials and packaging to their customers.
For the entire 2024 fiscal year, producer prices in Japan increased by 3.3 percent compared to the previous year. This rise was partly driven by increasing international prices of non-ferrous metals. Out of the 515 items surveyed, 387 showed price increases, while 106 recorded declines.
The most recent CGPI data indicates sustained inflationary pressure within Japan's production sector. This trend suggests a potential future impact on consumer prices, which could subsequently affect household budgets across the country.
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