JP: Producer Price Index

Sun Apr 12 18:50:00 CDT 2015

Consensus Actual Previous
Month over Month 0.1% 0.3% 0.0%
Year over Year 0.6% 0.7% 0.5%

Producer prices continue to languish. March producer prices were up 0.3 percent after slipping 0.1 percent on the month. Analysts expected a 0.1 percent increase. From a year ago, the PPI added 0.7 percent after 0.5 percent last month. The annual increase was expected to be 0.6 percent. Excluding the sales tax, the PPI retreated 2.1 percent from a year ago after dropping 2.4 percent in February. Once again, petroleum & coal products exercised downward pressure, declining 20.9 percent from a year ago. Most other component prices increased from a year ago.

The producer price index, is a measure of the average price level for a fixed basket of capital and consumer goods paid by producers.

The producer price index focuses on the prices of goods transacted between companies. It was previously known as the corporate goods price index. The index reflects the price level for the supply and demand of individual industrial goods. This index is calculated by the BoJ Research and Statistics Department. Three indexes are contained in this release - the domestic producer index, the export price index and the import price index. It is the domestic index that market players follow. The PPI comprehensively tracks input price pressures; however, the PPI has a track record of increasing and not necessarily feeding through to the CPI because of weak demand. But if an increase in the PPI is followed by a rise in the CPI, concerns about inflation may prompt the Bank of Japan to raise interest rates.