|Month over Month||0.2%||0.1%||0.3%|
|Year over Year||-2.0%||-2.1%||0.7%|
April producer prices edged up 0.1 percent on the month but dropped 2.1 percent from a year ago. Excluding the consumption tax, the PPI would have declined 2.2 percent on the year. The index was dragged down in part by a 23.4 percent drop in petroleum and coal prices. Prices in the other subcategories were mixed when compared with April 2014.
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.
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