| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.2% | 0.0% to 0.7% | 0.4% | 0.9% | 1.1% |
| Year over Year | 6.6% | 6.4% to 7.2% | 7.1% | 6.3% | 6.6% |
Highlights
Producer inflation in Japan continued to accelerate to 7.1% in June from upwardly revised gains of 6.6% in May and 5.4% in April as fuel costs rose further to reflect an earlier spike in crude oil prices and global memory chip shortages pushed up the prices for computers and other electronic goods. The weak yen also kept imports expensive. Crude oil prices slipped to around pre-Iran war levels in June on expectations that Washington and Iran would follow up on their ceasefire agreement but it takes some time before it filters through to product prices.
The 7.1% y/y increase in the corporate goods price index remains the highest since 7.4% recorded in March 2023, when upstream prices were on a gradual downtrend after having peaked at 10.6% in December 2022 in the aftermath of Russia’s invasion of Ukraine in February that year.
Japan has increased purchases of crude oil and naphtha, the key material for producing plastics and resins, from the United States and other countries to bypass the Middle East. This helped bring the month-on-month increase in the CGPI down to a slower pace of 0.4% after marking sharp gains of a revised 1.1% in May and 2.8% in April. The increase in June was led by fuels, utilities, wood and rubber products as well as building materials, indicating that the impact of domestic naphtha shortages lingered.
Details:
Japan June corporate goods (producer) prices +7.1% y/y (May revised to +6.6% from +6.3%); median forecast +6.6%
Japan June CGPI y/y rise of +7.1%, remains highest since Mar 2023 when it was +7.4%
Japan June producer prices +0.4% m/m, 4th straight rise (May revised to +1.1% from +0.9%); median forecast +0.2%
Japan June CGPI m/m rise led by fuels, utilities, plastics, building materials, largely as seen in May data
Japan producer inflation m/m rise slows in June as initial crude oil price spike, materials shortages triggered by Iran war have eased
June CGPI: farm produce prices y/y gain continues to slow to +7.0% y/y from +9.9% in May; rice, pork prices fall m/m
Japan June CGPI key energy prices: crude oil/coal products +22.8% y/y vs. May +13.7%
Japan June CGPI: non-ferrous metals +39.2% y/y vs. +42.1% in May amid high global prices on geopolitical tensions, robust demand
Japan producer inflation annual rate accelerates further, hit by elevated fuel costs; import prices also high on weak yen
Japan June CGPI import index +29.7% y/y in yen terms for 7th straight rise vs. +26.1% in May
Market Consensus Before Announcement
Japan’s producer inflation, measured by the corporate goods price index (CGPI), is expected to accelerate in June at the fastest pace in more than three years, driven by higher raw material prices and a weaker yen that has increased import costs.
The CGPI is forecast to rise 6.6 percent from a year earlier in June, the highest reading since March 2023. Producer inflation remained in the 2 percent range for 10 consecutive months from June 2025 through March 2026 before accelerating sharply in recent months. It unexpectedly jumped to 5.3 percent in April and extended its gain to 6.3 percent in May. The index is also expected to remain above 5 percent for a third straight month, the first such stretch since May 2023.
The CGPI has gathered momentum since geopolitical tensions in the Middle East escalated following the U.S.-Israeli strikes on Iran. The conflict has heightened uncertainty in the region, lifting raw material prices and adding upward pressure to producer prices in resource-poor Japan.
Although international crude oil prices had retreated from recent peaks by late June, rising labor costs and the yen’s continued weakness have added to inflationary pressure. The Japanese currency fell to its lowest level against the dollar since December 1986 in late June and was down about 10 percent from the same month a year earlier, pushing up import costs and, in turn, the CGPI.
On a month-on-month basis, the CGPI is expected to rise 0.2 percent in June, marking a fourth straight monthly increase after a 0.9 percent gain in May. Higher prices for fuels, utilities, chemical products, non-ferrous metals and plastics drove the increase in May.
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.