Japan July Producer Prices +2.6% Y/Y on Fuels; June +2.2%

--Japan July CGPI +2.6% Y/Y, MNI Median Forecast +2.3% 

--Japan July CGPI +0.3% M/M, MNI Median Forecast +0.2%

     TOKYO (MNI) - The monthly corporate goods price index (CGPI) with a 2015

base year was released by the Bank of Japan Thursday.

     * The key indicator of domestic producer prices rose 2.6% on year in July,

the seventh straight month of year-on-year increases after rising 2.2% in June,

led by higher costs for fuels, steel and metals.

     * The increase was stronger than the MNI survey median forecast of +2.3%

and remained the largest gain since +2.6% in November 2014.

     * Prices for petroleum and coal products rose 11.8% on year in July,

accelerating from +10.8% in June. Prices for nonferrous metals rose 13.0% on

year in July, also up from +11.4% in June. Prices for scrap and waste jumped

32.0% on year in July after +20.7% in June.

     * Despite the recent pickup in producer prices, consumer inflation remains

weak, as firms remain cautious about raising retail prices amid concern that

higher prices would lower sales. However, the recent pickup in private

consumption may prompt some companies to gradually raise prices.

     * On the month, the CGPI was up 0.3% in July (higher than the MNI survey

median forecast of +0.2%) after rising 0.1% in June. Higher costs for power

generation and non-ferrous metals offset lower prices for chemical products and

fuels.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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