MNI BRIEF: Japan CGPI Rises 2.5% Y/Y On Slower Import Prices

MNI (TOKYO) - Japan's corporate goods price index rose 2.5% y/y in August, down from July’s unrevised 3.0%, as import-price rises decelerated despite posting their seventh straight gain of 2.6%, down from last month's 10.8%, data released by the Bank of Japan showed on Thursday.

The data indicated slowing import prices, driven by the correction of the yen’s fall, will slow corporate pass-through of higher costs.

Electric power, gas and water (+10.6% y/y vs. +6.5% in June) boosted the results, but lower prices of petroleum and coal products (-4.0% vs. +0.4), and nonferrous metals (11.4% vs. 18.9%) weighed.

The CGPI fell 0.2% m/m in August after rising 0.5% in July, for the first drop since October 2023.

BOJ officials are increasingly confident of price revisions in or after October as firms transfer higher labour costs to retail prices, but they are focused on revisions of services prices, which will not be announced in advance before October. (See MNI POLICY: BOJ Examines Upping Pace Of Hikes)