Producer inflation in Japan eased for the fourth straight month in April as the government's expanded utilities subsidies continued to cap energy costs and slowing global demand has cooled off many commodities markets, data released Monday by the Bank of Japan showed.

In its quarterly Outlook Report released last month, the BoJ board revised up its forecast for inflation for the current fiscal year ending next March while foreseeing consumer prices will lose some steam and fail to reach the bank's elusive 2 percent target in a sustainable manner.

The Econoday Consensus Divergence Index stood at minus 8, slightly below zero, which indicates the Japanese economy is performing softer than expected. Excluding the impact of inflation, the index was at minus 25.

The corporate goods price index (CGPI) rose 5.8 percent on the year in April, slightly above the median economist forecast of a 5.6 percent rise (forecasts ranged from 5.0 percent to 6.0 percent gains). It was the 26th consecutive gain following increases of 7.4 percent in March (revised from 7.2 percent), 8.3 percent in February and 9.6 percent in January (revised from 9.5 percent). December's 10.6 percent rise remains the highest in 42 years, since November 1980, when the index rose 11.8 percent during the 14-month period of double-digit percentage gains through December 1980 in the wake of the 1979 oil crisis triggered by the Iranian Revolution.

On the month, the domestic CGPI rose 0.2 percent in April after edging up 0.1 percent (revised from being flat) in March and falling 0.3 percent in February and slowing from the recent peak of a 1.6 percent rise hit in April 2022. It was in line with the median economist forecast of a 0.2 percent rise (forecasts ranged from being unchanged to a 0.5 percent rise). The modest increase was led by higher costs for utilities (electricity, water), petroleum and coal products (coal cokes, gasoline, jet fuel), transport equipment (passenger cars, trucks, suspension and brake parts) and electrical machinery (electric luminaries). The prices for iron and steel as well as pharmaceutical products declined on the month.

The yen firmed slightly to an average ¥133.40 to the dollar in April from ¥133.86 in March, but remained weak compared to ¥126.13 a year earlier. Combined with more stable energy and commodities markets, the currency exchange factor has helped lower import costs from elevated levels. The dollar briefly surged to a 32-year high of ¥151.94 in October 2022 but Japan's second wave of massive yen-buying forex intervention pushed it down to a low of ¥143.55 in the same month.

The CGPI's import price index in yen terms now posted a decline on the year, falling 2.9 percent in April after rising a revised 9.6 percent in March, compared to a 6.5 percent drop (a 0.2 percent rise in March) in contract currencies. The yen-based price increase peaked at 49.2 percent in July 2022. The dollar depreciated 0.4 percent on the month against the yen after appreciating 0.9 percent in March, BoJ data showed.

The producer costs for electric power, gas and water -- the category that is also driving consumer prices higher -- rose 25.8 percent on the year in April but the pace of increase continued decelerating from 26.8 percent in March.

Iron and steel maintained a double-digit percentage gain but posted a slower increase of 10.9 percent after rising 17.4 percent the previous month. Those for chemicals continued slowing to a 1.9 percent rise from a 3.7 percent increase. The prices for non-ferrous metals fell 2.7 percent in April after rising 2.0 percent in March.

The prices for petroleum and coal products fell 6.6 percent on the year in April after dipping 3.3 percent in March after turning negative in January. The prices for lumber and wood products plunged 17.9 percent from a year earlier for the sixth straight drop after falling 14.7 percent.

Ceramic, stone and clay products eased to a 12.9 percent rise on the year in April from a 13.3 percent gain the previous month. Metal product prices were up 11.9 percent, off slightly from 12.4 percent.

The prices for foods and beverages -- a category with a high weighting of 144.6 out of 10,000 for the domestic CGPI -- rose 7.0 percent on the year in April after rising 7.6 percent in March. Those for transport equipment (150.9 weight) rose 3.8 percent, down from a 4.5 percent gain the previous month.

Producer inflation in Japan is forecast to have eased for the fourth straight month in April as the government's utilities subsidies continued to cap energy costs and slowing global demand has cooled off commodities markets. The corporate goods price index (CGPI) is expected to show a 5.6 percent rise on the year in April, decelerating further from increases of 7.2 percent in March, 8.3 percent in February, 9.5 percent in January and a 42-year high of 10.6 percent in December.

The Producer Price Index (PPI) is a measure of the average price level for a fixed basket of capital and consumer goods paid by producers. Analysts look to the PPI for early signs of inflation in the production process.

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.