MNI BRIEF: Higher Producer Cost Inputs Transitory On​​ CPI:BOJ

The Bank of Japan downplayed the impact of higher corporate goods price index on consumer price index, the full text of the Outlook Report released on Monday showed.

"Japan's producer price index (PPI) -- an index for goods prices at the producer level -- has shown a surge recently," it said.

However, the full text said, "It seems highly likely that the CPI inflation that merely reflects upstream cost increases will spread to other items to only a limited extent, and thus will be only transitory."

The BOJ, however, warned, "Since the aforementioned period of rising commodity prices in the 2000s was followed by the outbreak of the GFC -- which brought the economy into a completely different phase -- it may be difficult to grasp the effects of a rise in commodity prices in the somewhat long run from the experience during that period."

"Therefore, it is necessary to continue to carefully monitor the effects of the recent rise in commodity prices on domestic prices while taking into account the difference in the past and the current external environments," the BOJ said.