JP: Producer Price Index

Wed Dec 09 17:50:00 CST 2015

Consensus Actual Previous
Month over Month -0.3% -0.1% -0.6%
Year over Year -3.5% -3.6% -3.8%

Producer prices declined for the ninth consecutive month in November. The PPI was down 0.1 percent on the month and 3.6 percent from the same month a year ago as deflation continues to grip Japan. Petroleum & coal products, down an annual 24.9 percent, continue to weigh on the PPI. Nonferrous metals were down 9.4 percent on the year while chemicals & related products were 8.4 percent lower. However, food prices were up 1.2 percent and pulp, paper & related products added 1.1 percent.

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.