MNI BRIEF: Japan Apr CGPI Rise Slows to 5.8% Vs. Mar 7.4%

The y/y rise in Japan's corporate goods price index slowed to 5.8% in April from March's revised 7.4%, indicating that upstream cost increases had peaked, Bank of Japan data showed Monday.

The data showed that downstream pass-through of costs continued. A time lag exists between when firms transfer high costs to retail prices. BOJ officials will focus on whether the y/y consumer price index rise slows as expected amid ongoing pass-through of cost increases – particularly in the services sector.

The CGPI rose 0.2% from the previous month vs. the revised 0.1% gain in March. The slowing April rise, which was the 26th straight y/y increase, was due mainly to lower prices for beverages and foods, and petroleum and coal products. The April import price index fell 2.9% on a yen basis, for the first drop in 26 months, showing the rise of import prices due to the weak yen had peaked.

The government’s subsidies to lower utility charges from February lowered the April CGPI by 0.7pp from a year earlier, a BOJ official said.