| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.1% | -0.1% to 0.2% | -0.1% | 0.2% |
| Year over Year | 2.1% | 2.0% to 2.3% | 2.0% | 2.3% |
Highlights
Producer inflation in Japan eased further to 2.0% in February from 2.3% in January and 2.4% in December as domestic rice supply shortages have been resolved, fuel prices have been falling at a pace of over 10% on year and the decline in utilities deepened in February. Supply disruptions and strong demand have pushed up copper prices, keeping non-ferrous metals more than 30% above year-earlier levels, but the rate of increase in that metal group eased in the latest data.
The 2.0% increase in the corporate goods price index remains the slowest since 1.2% in April 2024. Producer prices have eased gradually in recent months after having hit a recent peak of 4.3% in each of February and March 2025 (the highest since 4.5% in June 2023). Whether the downtrend will reverse in the March 2026 data depends on how long the Mideast conflict since late February will last and how it will affect global energy prices in the longer term.
Details:
Japan Feb corporate goods (producer) prices +2.0% y/y (Jan +2.3%); median forecast +2.1%
Japan Feb producer inflation annual rate of 2.0%, remains slowest since +1.2% in April 2024
Japan Feb producer prices -0.1% m/m, 1st fall in 6 months (Jan +0.2%); median forecast +0.1%
Japan Feb CGPI m/m fall led by utilities; partly offset by rise in fuels, metal products
Japan producer annual inflation has slowed from above 4% in early 2025 on fuel subsidies, easing domestic rice supply shortages
Japan Feb producer inflation y/y slowdown due to easing farm produce prices (+18.5% vs. Jan +21.9%)
Japan Feb CGPI: key energy prices continue falling; crude oil/coal products (-11.7% vs. Jan -12.9%)
Japan Feb CGPI: non-ferrous metals +32.5% vs. +33.0% in Jan amid copper shortages
Japan Feb producer inflation slows also in light of deeper drop in utilities prices (-6.7% vs. -4.3% in Jan)
Japan firms face headwind as Feb CGPI import index jumps 2.8% y/y in yen terms for 3rd straight rise after +0.7% in Jan
Market Consensus Before Announcement
Japan’s producer inflation is expected to rise on the year for a 60th consecutive month, or five years, in February amid gains in industrial metals prices and an uptrend in crude oil prices as geopolitical tensions grow in the Middle East, but the pace of growth is expected to be the slowest in nearly two years.
Producer inflation, measured by the corporate goods price index (CGPI), is seen rising 2.1 percent on the year in February, slowing from a 2.3 percent increase in the previous month, when the pace of growth eased to the weakest since April 2024.
The pace of gains was partly offset by lower domestic oil products prices, including gasoline, reflecting the government’s measures to ease the burden of electricity and gas bills. In addition, prices of agricultural, forestry and fishery products, particularly rice, are showing signs of decelerating.
On a month-on-month basis, the CGPI is seen rising a slim 0.1 percent, marking a sixth straight monthly increase after a 0.2 percent gain in January.
Definition
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.
Description
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.